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Abbas🎩👾
@abbass.eth
Ethereum layer-1 network revenue collapses - What's causing it? (1/3) Despite a sharp rise in monthly users and daily transaction costs on Layer 2s, Ethereum Layer 1 network revenue has dropped by 99% since March 2024. Network fees peaked at $35.5 million on March 5, but the Dencun upgrade, which significantly lowered Layer 2 transaction fees, caused the decline after it went live on March 13.
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Aunt Homie
@infinitehomie
I’m slow. I presume this means that revenue dropping isn’t always going to be a good thing right? In theory it is, but aren’t L2 essentially built on L1?
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Abbas🎩👾
@abbass.eth
Yes, Lower Layer 1 revenue isn't always good, even if fees drop. As Layer 2 solutions built on Layer 1 attract more users with lower costs, fewer transactions happen on Layer 1, reducing demand for ETH and revenue. This can impact the security and sustainability of the Ethereum network, despite the scalability benefits.
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Aunt Homie
@infinitehomie
What would be the solve? Compelling folks to use Mainnet, or letting the slowdowns or the security issues compel people to head towards mainnet usage
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