Ethereum’s transaction activity is increasing, driven by Ether’s push toward the $5,000 price point. However, this growth coincides with rising competition that pressures its market dominance and fee generation.
Currently, Ethereum processes an average of over 1.7 million transactions daily, approaching all-time volume records according to blockchain analytics platform Nansen.
By contrast, Ethereum’s layer-2 solutions such as Arbitrum and Base claim significantly higher transaction counts, with more than 3.4 million and 8.6 million transactions respectively. Meanwhile, Aptos, an emerging layer-1 competitor, reported 3.8 million transactions on a recent day, as per The Tie.
Despite transaction growth, Ethereum’s active address count remains relatively steady, ranging between 400,000 to 600,000 since 2018 with intermittent spikes exceeding one million addresses.
This trend highlights a portion of Ethereum’s traffic transferring to other blockchains, including its native layer-2 networks, contributing to erosion in market share and downward pressure on protocol revenue streams.
Key factors at play include:
The March 2024 Dencun upgrade, which reduced gas fees and encouraged migration to more cost-effective layer-2 networks.
The rise of high-performance layer-1 blockchains like Solana and Sui, intensifying competition for users and developer attention.
Strategic shifts from the Ethereum Foundation to recalibrate network scaling and blockchain execution approaches.
Industry voices such as Polygon Labs’ CEO Marc Boiron caution against direct throughput-based competition as potentially risky for Ethereum’s ecosystem evolution.
As ETH nears historic price levels, these competitive challenges underscore the critical need for adaptive strategies in preserving Ethereum’s smart contract primacy amid a dynamic blockchain landscape.
