Ethereum Dominates Blockchain Fee Revenue with $2.728 Billion, Bitcoin Follows at $1.302 Billion

Ethereum Dominates Blockchain Fee Revenue with $2.728 Billion, Bitcoin Follows at $1.302 Billion

In a recent analysis by Lookonchain, Ethereum has emerged as the leading blockchain in terms of fee revenue, generating a remarkable $2.728 billion over the past year. This significant figure highlights Ethereum’s dominant position in the blockchain ecosystem, where it remains the preferred platform for decentralized applications (dApps) and smart contracts.

Ethereum’s Impressive Growth and Demand

Ethereum’s high fee revenue is a testament to the heavy usage and demand for its services across various sectors, including decentralized finance (DeFi) and non-fungible tokens (NFTs). The network’s fee income reached $365 million in the first quarter of 2024, marking an impressive year-on-year growth of 155%. The revenue generated through user transactions hit $1.17 billion in Q1 alone, an 80% increase from the previous quarter.

Bitcoin’s Substantial Fee Revenue

Bitcoin, the pioneer of blockchain technology, follows with a substantial $1.302 billion in fee revenue. While Bitcoin primarily functions as a store of value and medium of exchange, its significant fee income underscores its continued relevance in the cryptocurrency space. Innovations such as Bitcoin Ordinals, which allow the inscription of arbitrary data on the blockchain, have led to a noticeable increase in transaction fees in 2024. Additionally, Runes, which let users inscribe individual satoshis with unique identification numbers and embed them with arbitrary data, have contributed to up to 68% of Bitcoin transactions since the halving.

Other Noteworthy Blockchains

Following Bitcoin, Tron has generated $459.39 million in fee revenue. Solana, known for its high-speed transactions and low fees, earned $241.29 million. Other notable blockchains include Binance Smart Chain (BSC) with $176.56 million, Avalanche with $68.83 million, and zkSync Era with $59.77 million in fee revenues. Optimism and Polygon also made significant strides, generating $40.4 million and $23.91 million in fee revenue, respectively. These platforms play crucial roles in the Ethereum ecosystem, providing scalability solutions and lower transaction costs through layer 2 technologies.

Ethereum ETFs Projected to Attract Significant Inflows

According to a recent report by Steno Research, net inflows into spot Ether ETFs could reach an impressive $20 billion within the first year. The report predicts that ether could hit a minimum price of $6,500 by the end of this year, driven by the expected inflows into spot ETFs and other positive market factors. However, Andrew Kang, a founder and partner at Mechanism Capital, suggests that the price of Ether could drop significantly to as low as $2,400 following the launch of spot ETFs. Kang argues that Ether attracts less institutional interest compared to Bitcoin, with limited incentives for converting spot Ether into ETF form. He estimates that spot Ether ETFs may attract around 15% of the flows seen by spot Bitcoin ETFs. This estimation aligns with the range suggested by Bloomberg ETF analysts Eric Balchunas and James Seyffart, who believe that spot Ether ETFs may attract 10-20% of the flows seen by spot Bitcoin ETFs.

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