Mystery of Ethereum’s Fee Surge: What Lies Beneath the Dencun Upgrade?

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The Ethereum blockchain experienced a 3% increase in fee earnings from 2023 to 2024, despite the implementation of the Dencun upgrade designed to lower network fees. Ethereum generated $2.48 billion in fees over the year, maintaining its status as the highest-earning blockchain. It was followed by Tron, which earned $2.15 billion, and Bitcoin with $922 million, according to a report from CoinGecko.

This rise in fees suggests that Ethereum continues to lead in revenue, even amidst reduced L2 transaction costs and a shift of users from the L1 chain to L2 scaling solutions. The Dencun upgrade, aimed at lowering transaction fees for layer 2 networks to enhance blockchain scalability, sparked concerns among analysts about potential negative impacts on mainnet revenue and Ether’s market value.


In the first quarter of 2024, Ethereum reported fee earnings of $1.17 billion, constituting nearly half of its annual total. This timeframe marked Ethereum’s most profitable quarter in over two years, fueled by heightened onchain activity due to various airdrop programs. Despite strong fee earnings, Ethereum’s price performance fell short of expectations.

Contributing to the broader landscape of blockchain economies, layer 1 protocols amassed $6.60 billion in fees during 2024, while layer 2 counterparts collected $294 million. Tron’s fee earnings surged by 116.7% compared to 2023, while Bitcoin’s earnings grew by 16%. Solana recorded the most dramatic growth, with a staggering 2,838% jump in annual fee earnings, bolstered by the memecoin trend, culminating in 100 million active wallets by October. CoinGecko’s report encompassed the time frame from January 1, 2023, to December 31, 2024, providing a comprehensive overview of blockchain fee dynamics.