Ethereum Base-Layer Fees Hit Multi-Year Lows as Activity Migrates to Layer-2 Networks

Ethereum's base-layer transaction fees have plummeted to their lowest levels in years, with the 90-day moving average of daily fees dropping below 300 ETH for the first time since July 2017. Data from Glassnode and DeFiLlama reveals a steady decline in fee revenue since early 2025, with current figures around 289 ETH, down sharply from over 1,800 ETH earlier in the year.

This dramatic fee reduction is attributed not to a collapse in network usage, but to a structural shift in user behavior. While Ethereum's Total Value Locked (TVL) remains robust at over $70.5 billion, indicating sustained demand for DeFi and staking services, user activity is increasingly migrating to Layer-2 scaling solutions like Arbitrum, Optimism, and Polygon. These networks process transactions off-chain before settling compressed data on the mainnet, significantly reducing congestion and cost.

Key technical upgrades are accelerating this trend. The successful implementation of EIP-1559, The Merge's transition to Proof-of-Stake, and the recent Fusaka upgrade—which expanded data capacity and improved throughput—have collectively reduced pressure on the mainnet. These changes facilitate more efficient settlement for rollups and Layer-2s, positioning Ethereum's base layer as a secure settlement environment while everyday activity occurs on cheaper secondary layers.

The shift is reshaping Ethereum's revenue profile. Chain revenue and application revenue have followed fees downward, currently standing at approximately $8.5 million and $6.6 million, respectively. This reflects value spreading across multiple execution layers rather than vanishing from the ecosystem. While low fees benefit users by making interactions with dApps more accessible, they present a nuanced challenge for network economics by reducing the amount of ETH burned via EIP-1559, potentially affecting Ethereum's deflationary pressure.

Despite ETH's price correcting to around $3,127, analysts suggest the fee decline is more linked to this structural migration than to waning interest. The long-term outlook hinges on continued Layer-2 adoption and upcoming upgrades like proto-danksharding (EIP-4844), which aims to further reduce data costs for L2s, potentially cementing a future where mainnet fees remain predictably low as the ecosystem scales efficiently.