According to Cointelegraph, the Ethereum network has experienced a significant decline in its primary revenue source from layer-2 (L2) scaling chains, known as "blob fees." Data from Etherscan reveals that in the week ending March 30, Ethereum earned only 3.18 Ether (ETH) from blob fees, equivalent to approximately $6,000 as of April 1, 2025. This represents a 73% decrease from the previous week and a staggering 95% drop from the week ending March 16, when blob fee income surpassed 84 ETH.
The decline in blob fees follows Ethereum's Dencun upgrade in March 2024, which shifted L2 transaction data to temporary offchain stores called "blobs." While this upgrade reduced costs for users, it also significantly decreased Ethereum's overall fee revenue, initially by as much as 95%, according to asset manager VanEck. Matthew Sigel, VanEck's head of digital asset research, noted in a November 2024 post on the X platform that "ETH Fees Were Weak Due to Lack of Blob Revenues as L2s Have Not Filled Available Capacity." Since then, the growth in blob fees has been inconsistent, with Ethereum's weekly blob fee income peaking at nearly $1 million in November before sharply declining in recent weeks, as reported by Dune Analytics.
The ongoing struggle to generate substantial income from blob fees highlights concerns about Ethereum's scaling model, which heavily relies on L2s for transaction throughput. Arndxt, author of the Threading on the Edge newsletter, emphasized in a March 31 X post that "Ethereum’s future will revolve around how effectively it serves as a data availability engine for L2s." Michael Nadeau, founder of The DeFi Report, stated in an X post that L2 transaction volumes would need to increase more than 22,000-fold for blob fees to fully offset Ethereum’s peak transaction fee revenues.
Despite these challenges, Ethereum's economic model continues to evolve. The network's upcoming Pectra Upgrade, scheduled for this year, aims to significantly alter how Ethereum allocates blob space. Sassal, founder of The Daily Gwei, expressed optimism in a March 17 X post, stating, "The plan is simple: scale Ethereum as much as possible to capture as much marketshare as we can - worry about fee revenue later." As Ethereum navigates these growing pains, the focus remains on enhancing its scalability and data availability to support the expanding L2 ecosystem.
