Ethereum’s 58% Fee Drop Has a Catch for ETH Holders
Ethereum processed 54% more transactions this year, yet users paid 58% less ETH in total fees and supply grew, so the scaling payoff has reached users, not holders.
Key Takeaways
- Daily mainnet transactions rose 54% to 2.17 million
- Median fee averaged 3.5 cents, down from 35
- Total fees paid in ETH fell 58%
- ETH supply grew by about 842,000 coins
The activity and cost figures come from Ethereum Institutional’s State of the Ledger report, published on November 5, while the fee and supply totals are Coindoo’s own count of Coin Metrics data.
93,000 ETH less from a busier chain
Ethereum Institutional is a nonprofit founded this year with anchor funding from ETH treasury companies BitMine and SharpLink, Ethereum co-founder Joseph Lubin and Mihai Alisie. Its report states that it does not speak for the Ethereum Foundation. The report’s data shows mainnet averaging 2.17 million transactions a day from January to October, 54% more than in the same months of 2025. Over the same period, the average of daily median fees dropped from 35 cents to 3.5 cents.
Coindoo summed Coin Metrics’ daily total-fee and transaction data for the same ten months of both years. Mainnet processed 659 million transactions, up from 426.8 million, which confirms the report’s growth figure. Total fees, burned amounts included, fell from 160,676 ETH to 67,665 ETH. That is a 57.9% decline, or about 93,000 ETH.
Per transaction, the drop was steeper. The average transaction paid about 0.00038 ETH in fees in 2025 and about 0.00010 ETH this year, a fall of roughly 73%. A 54% rise in volume could not make up for a per-transaction fee that shrank by almost three quarters. The same gap between activity and income ran through Robinhood, Coinbase and Circle’s third quarter.
The report’s 90% figure measures something narrower: the dollar cost of a typical transaction, taken at the median.
Capacity outran demand
Under EIP-1559, each block has a gas target set at half its limit. The base fee climbs when blocks run above that target and eases when they run below it. Blocks now carry a 60 million gas limit, double the 30 million of 2024, and Ethereum Institutional reports that they run near their target. Blocks sitting at target leave the base fee with no upward pressure. ultrasound.money data puts the average base fee at 0.27 gwei in 2026 through mid-October, against 2.00 gwei across 2025.
Rollups add a second outlet. Since the Dencun upgrade in March 2024, they have posted their data in blobs, a separate space with its own fee market under EIP-4844. The report, citing the Ethereum Foundation’s strawmap, says Fusaka raised the blob target from 6 to 14 per block and the maximum from 9 to 21. Fusaka activated in December 2025.
Layer 2 networks averaged 23.3 million transactions a day this year, up 18% and roughly ten times mainnet’s count. Over the 30 days to November 2, Base led with 8.3 million a day, followed by Robinhood Chain at 6.9 million. All of that traffic has burned little ETH: blob fees have destroyed about 4,700 ETH in total since March 2024, according to ultrasound.money.
Only part of the fee leaves circulation
Total fees and burned ETH are different numbers, and only the burned portion offsets new issuance. Ethereum’s fee documentation splits the payment as follows:
Where each part ends up
Burned
Paid on every mainnet transaction; the main source of the burn.
To the block proposer
An optional extra for faster inclusion; existing ETH changes hands.
Burned
Paid by rollups when they post batches of layer 2 transactions.
Newly created
Paid to validators by the protocol for consensus duties, not by users.
The burn covers less than 3% of issuance
After the Merge in September 2022, Ethereum’s “ultrasound money” argument held that burning would outrun issuance and shrink supply. For about 18 months it did. Supply fell from October 2022 to April 2024, according to ultrasound.money. The last month it shrank was March 2024, the month Dencun moved rollup data into blobs. Supply climbed back above its Merge-day level in February 2025.
Coin Metrics’ supply series confirms the climb continued this year. Supply rose from about 121.34 million ETH on December 31, 2025, to 122.18 million on October 31, 2026, an increase of roughly 842,000 ETH, or 0.7%. The pace has picked up: in ultrasound.money’s monthly data, net additions from January to September reached 751,838 ETH. That is about 20% more than the 628,472 ETH added in the same months of 2025.
Two daily numbers explain the gap. In the 30 days to October 18, validators received about 2,966 new ETH a day. The entire 30-day burn came to 2,417 ETH, less than 3% of what was issued over the period.
Net change in ETH supply by calendar year
2023
−343,945 ETH (−0.29%)
2024
+288,473 ETH (+0.24%)
2025
+866,413 ETH (+0.72%)
2026*
+804,368 ETH (+0.66%)
Teal marks a shrinking supply, amber a growing one. Years run January 1 to January 1; *2026 runs to October 18. Source: ultrasound.money.
Staking turns supply growth into a transfer
Staked ETH reached 44.2 million on October 31, up from 33.3 million a year earlier, according to Ethereum Institutional, which derives the figure from Token Terminal data. As a share of circulating supply, staking rose from 27.6% to 36.1%. About a third more ETH now backs consensus.
Each additional staked coin dilutes the reward for the rest. Under Ethereum’s reward rules, total issuance grows with the square root of staked ETH. A bigger pool therefore means more new ETH overall but a smaller return per coin. The current 30-day rate of roughly 1.08 million ETH a year, spread across about 43.8 million staked ETH by ultrasound.money’s count, pays stakers close to 2.5% a year. That figure comes before tips, MEV and operator commissions.
That makes this year’s supply growth a redistribution between two groups of holders. A staker’s share of all ETH grows by about 1.7 percentage points a year, the yield minus supply growth. A holder who does not stake sees their share shrink by roughly the supply growth rate, 0.82% over the 365 days to October 19. User fees now do almost nothing to offset that shift.
Stablecoin transfers grew on cheap block space
Stablecoins moved $25.8 trillion across mainnet from January to October, 61% more than a year earlier, the report shows. The number of transfers rose 2.5 times to 463 million. Those transfers grew in the same months that total fees fell by more than half, so the stablecoin expansion ran on cheaper block space and did not rebuild the fee base.
The headline volume needs two adjustments. Transfers spike at each quarter end, so only like periods compare cleanly. Gross volume also counts bot activity and internal transfers. Visa’s onchain analytics filters those out, and on that measure mainnet stablecoin volume grew about 50% in the year to September 30. That window differs from the report’s January-October total.
The case for cheap fees, and the number to watch
Ethereum Institutional draws a different conclusion from the same data. With mainnet fees at a few cents and over a third of ETH staked, its report argues that account controls and confidentiality now deserve at least as much institutional attention as throughput and fees.
Cheap fees are also the stated aim of the Ethereum Foundation’s roadmap. It targets a mainnet running 1 billion gas a second and layer 2 data capacity designed to keep rollup costs low. The bet behind that design is that demand for ETH as staking collateral, DeFi collateral and settlement money can support its value without high fees.
The next upgrade adds more room. Ethereum Institutional expects Glamsterdam in early 2027, although no date is confirmed. The upgrade is designed to support a proposed 200 million gas limit, up from 60 million today, and the report notes that greater capacity could put downward pressure on gas prices. The Ethereum Foundation postponed the Hoodi testnet fork on October 22 to study one repricing change, and has not set a new date.
The base fee is the figure that would test either reading. Data from ultrasound.money puts the break-even point, where the burn would match issuance at today’s gas use, at roughly 13.6 gwei. The 30-day average stands at about 0.37 gwei, more than 35 times lower. Until Glamsterdam activates, watch the monthly net supply figure. It has ranged from about 74,000 to 90,000 ETH in every full month of 2026, and it shows whether demand for block space is closing that gap or capacity is still running ahead of it.
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 5,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
