The Ethereum network’s primary source of income from layer-2 (L2) scaling chains, known as “blob fees,” has plunged to its lowest weekly levels for 2025, according to recent data from Etherscan. In the week concluding March 30, Ethereum earned merely 3.18 Ether (ETH) from blob fees, translating to approximately $6,000 as of April 1. This figure signifies a drastic 73% drop from the preceding week and more than a 95% decline from March 16, where Ethereum’s blob fee income peaked at over 84 ETH.
Source: Etherscan
The substantial decline in blob fee income illustrates the ongoing challenges facing Ethereum post-Dencun upgrade, which migrated L2 transaction data to offchain stores called blobs. Although this upgrade aimed to reduce costs for users, it also resulted in a staggering revenue drop, initially estimated at 95% by asset manager VanEck.
Matthew Sigel, VanEck’s head of digital asset research, noted that weak ETH fees were largely due to the diminished blob revenues, as L2s were unable to fill the available capacity. The growth trajectory of blob fees has been volatile, peaking at close to $1 million in November 2024 before sharply declining in recent weeks.
Ethereum’s blob fee income has been uneven. Source: Dune Analytics
The reduction in blob fees has raised concerns regarding Ethereum’s scaling model, which is dependent on L2s for transaction throughput. Industry experts suggest that Ethereum’s future sustainability hinges on its ability to serve as a robust data availability engine for L2s. For instance, Michael Nadeau, founder of The DeFi Report, indicated that L2 transaction volumes would need to increase substantially—over 22,000-fold—to fully compensate for the peak transaction fee revenues that Ethereum previously enjoyed.
Despite these challenges, Ethereum’s scalability efforts continue to evolve. The upcoming Pectra Upgrade is anticipated to significantly change how Ethereum allocates blob space, with a focus on maximizing market share. Sassal, founder of The Daily Gwei, summarized this vision by stating, “the plan is simple: scale Ethereum as much as possible to capture as much market share as we can – worry about fee revenue later.” This proactive approach highlights the ongoing evolution of Ethereum’s economic landscape.
As these developments unfold, it will be crucial for stakeholders within the Ethereum ecosystem to monitor the impact of transitioning to a more scalable model while addressing the financial sustainability of the network.
