Ethereum fees hit new lows as upgrades shift activity to Layer2

$ETH base layer transaction fees have dropped to their lowest level in 2025. However, contrary to speculations about the network losing customer, data show that this is a deliberate structural shift due to scaling upgrade.

🔹 Glassnode data show that total transaction fees have dropped sharply from over 1,800 ETH January-May 2025 to around 289 ETH currently.

The Fusaka upgrade and previous improvement have expanded data capacity, helping Layer 2 network Rollup settle transaction more efficiently and reduce pressure on the Mainnet.

🔸 Despite the drop in fees, the ecosystem Total Value Locked remain stable at over $70.5 billion.

This confirm that user and capital are still staying with ETH, but they are doing their daily activitie on cheaper Layer 2 instead of paying expensive fees on Layer 1.

🔹 Chain revenue and application dropped to $8.5 million and $6.6 million respectively. $ETH is transforming into a settlement layer, leaving the high frequency trading playing field to Layer 2.

With $ETH price correcting around $3,127, the market is getting used to a new economic model where low fee revenue does not mean network failure.

Do you think low Gas fees are a good sign for adoption or a risk for ETH deflationary nature Ultra Sound Money?

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