Ethereum L1 Generates $1.67B in DeFi Fees, Scaling Imperatives Ahead
Table of contents
Weekly Trends and Transaction Activity
While Ethereum’s daily DeFi fee revenue is currently around $170,000—a significant drop from its peak levels in May 2023—its weekly fees still exceed $1 million. In contrast, other chains have shown minimal activity, with many posting near-zero daily fees. Additionally, although Ethereum’s Layer-1 has recorded approximately 149 million DeFi transactions, competing chains like Base and Arbitrum One report much higher transaction volumes, indicating diverse usage patterns across ecosystems.
Scaling Challenges and the Need for L1 Strength
Ethereum co-founder Vitalik Buterin stresses that despite a rollup-centric roadmap, a higher Layer-1 capacity remains essential. He warns that increasing gas limits is critical to support over 120 million weekly users, lower fees, and safeguard against potential censorship on congested L2s. Buterin also raises concerns about ERC-20 issuance on L2s and advocates for further L1 scaling, suggesting that capacity may need to expand by 5.5x to 9x to handle large-scale exits and improve interoperability.
Conclusion
As Ethereum continues to lead in DeFi revenue and on-chain activity, the push for further scaling is paramount. The network’s ability to maintain its dominant position depends on addressing these challenges, ensuring long-term security, and optimizing transaction efficiency.