Ethereum Performance Well in the First Quarter of 2024

Ethereum’s business model, primarily centered around transaction fees, proved highly lucrative in the early months of 2024. The network garnered a whopping $1.17 billion in fees, breaking down to an impressive daily average of $3 million.

Year-on-Year Growth Analysis

This remarkable revenue marks a 155% increase over the same period in 2023, showcasing Ethereum’s growing dominance and sustainability as a blockchain network.

Ethereum’s Yearly Profitability Comparison

Ethereum: The Only Blockchain to Net Positive Profit

What Does Net Positive Profit Mean for Ethereum?

For the second year running, Ethereum reported net positive earnings from block space profitability, a critical metric that measures the revenue from transaction fees against the costs associated with block rewards or incentives for validators.

Report Highlights

According to the “Ethereum Investment Framework,” Ethereum stands out as the only profitable public blockchain where user fees exceed the tokens distributed as incentives.

Ethereum’s DeFi Ecosystem: Flourishing Against Odds

Current State of Ethereum’s DeFi

As of the first quarter of 2024, the Total Value Locked (TVL) in Ethereum’s DeFi platforms reached an impressive $52 billion, marking an 80% increase from the previous year. Although this is yet to surpass the high of $105 billion recorded in November 2021, the steady growth signals a robust recovery and sustained interest in Ethereum’s DeFi offerings.

On-Chain Dynamics: ETH Exits Exchanges

Trends in ETH Distribution

A significant trend observed in this period is the reduction of ETH held on exchanges, which dropped to levels unseen since 2016. Conversely, an unprecedented 33.74% of ETH is now locked in smart contracts on Ethereum, influenced by the popularity of protocols like Lido and EigenLayer.

Layer 2 Networks: Enhancing Ethereum’s Scalability

L2s Outperforming the Main Ethereum Chain

Designed to enhance Ethereum’s scalability, Layer 2 networks (L2s) have seen notable activity, with transaction volumes on these networks quadrupling those on the main Ethereum chain. Notably, Base is emerging as a strong contender, potentially set to surpass Arbitrum if its growth trajectory continues.

Upcoming Developments: Prague Electra Hard Fork

What to Expect from the Next Ethereum Update

The Prague Electra hard fork, scheduled for later in 2024, aims to address potential issues stemming from the rapid expansion of Ethereum’s pool of validators. This update is crucial for maintaining the network’s integrity and scalability.

In conclusion, Ethereum’s performance in the first quarter of 2024 sets a positive tone for the rest of the year. With its robust business model, flourishing DeFi ecosystem, and strategic technological advancements, Ethereum is well-positioned for continued growth and innovation.