Written by: David, Deep Tide TechFlow
In the past two days, the hottest debate on English-speaking crypto Twitter has been about Ethereum's revenue.
On September 7, Messari's enterprise research manager AJC posted a message, directly pointing out that the Ethereum network is falling into "death." He stated that although the price of ETH reached a new high in August, Ethereum's revenue for the month was only $39.2 million.
This figure represents a 75% decrease compared to $157.4 million in August 2023, and a 40% decrease compared to $64.8 million in August 2024. At the same time, this is also the fourth lowest monthly revenue in Ethereum's history since January 2021.
AJC lamented that Ethereum's fundamentals are collapsing, but everyone seems to only care about the rising price of ETH, regardless of whether the network is actually healthy. Two days after this post was published, it has already garnered nearly 380,000 views and nearly 300 replies.
Why is there so much attention on Ethereum's fundamentals now?
The timing is indeed subtle. ETH is currently at the peak of a bull market, with prices hitting new highs, but the underlying network activity and Ethereum's own positioning are quietly changing.
After the Dencun upgrade in 2024, L2s such as Base and Arbitrum have become dominant, with mainnet transaction fees dropping significantly, causing revenue to shift to these scaling layers. This year, with the popularity of tokenized stock plays, SBET and BMNR are competing to reserve ETH, and mainstream finance and Wall Street are beginning to use ETH as a tool for major financial leverage.
Now, Ethereum itself seems more like a Lei Feng-style altruistic banner, waving in response to market trends and pointing the way for others, but riddled with holes itself?
The decline in revenue is indeed an indisputable fact, but whether this is a signal of Ethereum's own decline is a matter of debate within the community.
Proponents: Revenue is the lifeblood, the alarm has sounded
ACJ and other supporters' core view is actually quite simple: revenue is the correct metric for evaluating L1s.
Specifically, a chain's revenue mainly comes from transaction fees and block space usage fees, which are the core indicators of real user demand for your chain.
As the largest platform in the crypto world, Ethereum's core competitiveness lies in "block space demand": it enables the network to efficiently handle smart contracts and decentralized applications, which is a greater advantage than Bitcoin's simple value storage, and is also a major narrative differentiator from Bitcoin.
But now, with revenue approaching zero, it means user demand for the mainnet is shrinking. Even though L2s are flourishing, AJC believes the entire ecosystem lacks new users to support so many L2s.
You might ask, why is revenue tied to Ethereum's fundamentals?
The logic of the original poster and supporters is that revenue is collected and burned in the form of ETH, which directly drives ETH's deflationary mechanism. If revenue collapses, the amount burned decreases, supply pressure on ETH increases, and long-term value becomes difficult to maintain.
More importantly, in the last bull cycle, the Ethereum community boasted about high on-chain revenue as "block space premium," proving strong network demand. Now the situation has reversed, and this is not a coincidence, but a real collapse of demand drivers.
Although somewhat pessimistic, a more neutral view is that the network is the asset itself. Prices can be driven up by speculation in the short term, but if they deviate from fundamentals, they will eventually return to reality. This rule has been proven countless times in other crypto infrastructure projects.
From an observer's perspective, AJC's revenue logic does make sense, at least highlighting the hidden risks under the ETH bull market bubble. But if other ecosystem indicators, such as on-chain activity, are ignored, this view may be somewhat biased.
Opponents in Full Force: Is Revenue Decline a Good Thing?
Once AJC's view was posted, the comment section instantly became a battleground, with opponents in full force expressing strong disagreement with this decline narrative.
Unlike typical ETH defenders, opponents are looking at Ethereum with a broader narrative. Their core rebuttal is:
Treating Ethereum as a tech company seeking to maximize revenue is a fundamental cognitive error. Ethereum now is simply more like a cryptocurrency, a commodity with inelastic supply, or an emerging economy.
From this perspective, declining revenue is not a problem, but a positive sign of successful design, as it better promotes broader user adoption and ecosystem growth.
Take Bankless co-founder David Hoffman as an example. He compares Ethereum to early Singapore or Shenzhen, a paradise conducive to business freedom. In such an environment, your focus should not be on how much tax the city can collect, but whether the city is driving infrastructure and economic growth.
Former Wall Street trader and Etherealize founder Vivek Raman also pointed out that Bitcoin has almost no revenue and is not considered in decline, so why should Ethereum be judged by revenue?
Their logic actually stems from Ethereum founder Vitalik Buterin's early vision, that Ethereum is a commodity with inelastic supply, and its valuation depends on supply and demand dynamics, not quarterly reports. Excessive revenue can actually cause anti-network effects, as high gas fees scare away users.
In fact, these opposing views can be traced back to Vitalik's early vision.
In the white paper, Vitalik described ETH as the network's "crypto fuel," often compared by the community to digital oil, with its value depending on supply and demand dynamics, rather than company-like quarterly financial reports.
High fees (the source of revenue) have been proven to hinder user adoption, creating a negative cycle that the community sees as an anti-network effect.
Therefore, in their eyes, the decline in Ethereum mainnet revenue is actually a good thing to some extent.
After the Dencun upgrade in 2024, L2s shifted the mainnet load, resulting in reduced revenue. But this means lower fee barriers, attracting mass users to engage in DeFi, NFT, and even institutional-grade applications.
In the comments, Tom Dunleavy, head of risk investment at Varys Capital, bluntly stated that L1 revenue is a stumbling block to ecosystem growth;
Ethereum community cycle trader Ryan Berckmans threw out data: when 60% of stablecoin market cap is on Ethereum, when it is named by the US Treasury Secretary, and when all on-chain activity indicators are improving, how can this be called decline?
Ethereum's Next Crossroads
Amidst the lively debate, a fundamental question is actually being addressed: how should we value Ethereum?
From the comments, most opponents believe Ethereum is shifting from a busy execution layer to a stable global settlement layer. If you use the logic of tech stocks and value it based on revenue, it is somewhat rigid.
From the logic of tech stocks, revenue is clearly the most important. If a revenue collapse is truly a sign of weak demand, then the risk of a short-term bull market bubble bursting is not small.
But the various rebuttals in the comments are actually a multi-metric narrative, emphasizing the health of Ethereum's ecosystem and its long-term transformation. Revenue itself is not that important; its valuation comes from recognition by all parties and the entire crypto ecosystem's dependence on Ethereum.
The debate may end here, but Ethereum's story is far from over.
Transforming from a crypto technology platform to a global economy naturally comes with growing pains, such as declining revenue and L2s eating into market share;
But this transformation may be the necessary path for Ethereum to mature.
Just as the internet evolved from the early paid dial-up era to widespread free broadband, on the surface, operators' per-user revenue declined, but the scale of the entire digital economy achieved exponential growth.
Ethereum is currently at a similar turning point: the decline in mainnet revenue may precisely make room for larger-scale ecosystem prosperity. The rise of L2s is not "stealing" Ethereum's value, but amplifying Ethereum's strategic value as a settlement layer.
More importantly, this debate itself demonstrates Ethereum's unique position in the crypto world—no one would fiercely debate Bitcoin's "declining revenue," because everyone has long accepted its positioning as digital gold.
The reason Ethereum can spark such heated discussion is precisely because it carries a more complex and grand vision.
If Ethereum is healthy, everyone benefits. Who knows, maybe the next bull market turning point will start right here?