The fees and revenue generated by the crypto network are useful indicators of market developments. When the bulls have control, fees and revenue rise, but when the bears take charge, demand drops while fees and revenue plummet.
Many crypto network earnings have fallen short of asset prices for half a year now, in the current bear market cycle. On June 7, the founder of Crypto Pragmatist, Jack Niwold, noticed this pattern and explained why he believes that Ethereum is still the king of the crop
In November and May when the gas prices hit triple digits, Ethereum became unusable to an average person but still people were willing to pay for it. This is because Ethereum is the most popular dapp platform which means that it has a first-mover advantage, as well as the ability to support more transactions than any other L1s.
“Ethereum Block space is a premium product: something for the highest-end, customers who are most ready to pay any amount of money. Take a look at the BAYC land sale.”
According to Nield, although alternate layer 1 networks do not profit from fee flexibility, their competitive advantage fades over time during periods of low activity.
However, he mentioned Solana as a good example which has seen a price crush on-chain over a few months, and yet the project is still maintaining a $4 million daily transacted value.
“It’s not enough to just have a blockchain, even if it’s much faster and cheaper than Ethereum. You need to have a reason for people to use your blockchain. For most projects, that means having some kind of economic activity taking place on-chain.”
Ethereum remains the most revenue-generating network
As the market continues to develop, it seems that Newwald is correct in his assessment that Ethereum remains the most revenue-generating network, despite criticism for its high fees. In the long run, it may be worth it to pay higher transaction costs on Ethereum if the platform continues to be the go-to destination for dapps.
ETH has the most active development community in the space. There are thousands of developers working on Ethereum-based projects, and new applications are being built on the platform every day. This constant stream of innovation keeps users coming back to ETH, and it’s one of the main reasons why the network is so successful.