Ethereum Blob Fee Revenue Plummets 95% in 2025 Crisis

Ethereum’s Blob Fees Drop to Record Lows

Ethereum’s income from blob fees has plummeted by over 95% since mid-March 2024, raising alarm about the network’s future revenue model following the Dencun upgrade. In a recent analysis, data from Etherscan reveals a steep decline in weekly blob fees, with earnings dipping to just 3.18 Ether—or roughly $6,000—by March 30.

Understanding the Recent Decline in Ethereum Blob Fee Revenue

The recent drop in Ethereum’s blob fee revenue has raised significant concerns within the cryptocurrency community. As reported, Ethereum’s weekly earnings from blob fees plummeted over 95%, reaching unprecedented lows. This decline is particularly relevant following the Dencun upgrade in March 2024, which altered how layer-2 (L2) transaction data is processed by introducing offchain storage called ‘blobs’. While this upgrade aimed to lower costs for users, it also inadvertently diminished Ethereum’s income from blob fees, integral to its revenue model.

This shift highlights a critical moment in Ethereum’s evolving landscape, informed by its historical challenges with scalability and transaction fees. In November 2023, blob fee revenue peaked at nearly $1 million, but has since experienced severe fluctuations, raising questions about the sustainability of Ethereum’s reliance on L2 solutions for transaction throughput. With experts predicting that L2 transaction volumes must increase dramatically to restore revenue levels, the Ethereum community faces a pivotal challenge: adapting its economic model to ensure future growth and viability. The ongoing exploration of adjustments like the upcoming Pectra Upgrade underscores the urgency to innovate amid blockchain’s complex and evolving ecosystem.

Ethereum’s Blob Fee Revenue Decline: A 2025 Low Point

Ethereum’s income from blob fees has seen a staggering decline of over 95% since mid-March, raising important questions about the network’s long-term revenue sustainability. Recent data from Etherscan reveals that for the week ending March 30, 2025, Ethereum generated only 3.18 Ether from blob fees, equivalent to approximately $6,000. This figure represents a 73% drop from the previous week and a dramatic decline from the 84 ETH earned the week prior, highlighting a significant downturn in Ethereum’s revenue model.

Impacts of the Dencun Upgrade on Blob Fees

The Dencun upgrade, implemented in March 2024, shifted L2 transaction data to temporary off-chain storage referred to as “blobs.” While the upgrade was designed to reduce costs for users, it inadvertently slashed the overall fee revenue for the Ethereum network by as much as 95%, as noted by asset manager VanEck. Matthew Sigel, VanEck’s head of digital asset research, stated, “ETH Fees Were Weak Due to Lack of Blob Revenues as L2s Have Not Filled Available Capacity.” This emphasizes the need for enhanced usage of layer-2 solutions to sustain Ethereum’s economic viability.

An Uneven Revenue Stream

According to data from Dune Analytics, Ethereum experienced peaks in blob fee income, reaching nearly $1 million in November, only to plummet in the subsequent weeks. This inconsistency raises concerns about the network’s dependency on L2s for transaction throughput. As noted by industry expert arndxt, “Ethereum’s future will revolve around how effectively it serves as a data availability engine for L2s.”

The upcoming Pectra Upgrade seeks to transform how Ethereum manages its blob space, reflecting a strategic pivot towards scaling. As community member Sassal eloquently stated, “The plan is simple: scale Ethereum as much as possible to capture as much market share as we can – worry about fee revenue later.” With evolving economics and future upgrades on the horizon, Ethereum continues to navigate the complexities of its blob fee revenue decline.

Analysis of Ethereum’s Blob Fee Revenue Decline

The news of Ethereum’s week-over-week decline in blob fee revenues poses significant implications for the network’s financial health and its layer-2 (L2) ecosystem. With earnings plummeting over 95% since March, reaching only 3.18 Ether in the last week of March, concerns are growing about Ethereum’s ability to sustain its operational costs through its proposed scaling model. This steep drop in revenue raises questions about the effectiveness of the Dencun upgrade, which aimed to enhance user experience by migrating transaction data to off-chain storage, thereby reducing fee expenses for users.

For the crypto industry at large, this decline points to a critical need for L2 transaction volumes to dramatically increase—potentially up to 22,000-fold—to reinstate the revenue capacity witnessed before the recent upgrades. As highlighted by industry experts, Ethereum’s strategy must refocus on enhancing its role as a data availability engine, while upcoming proposals like the Pectra Upgrade seek to revamp blob space allocation. Thus, Ethereum’s sustainability depends not only on the adoption of L2s but also on innovative upgrade strategies to stabilize and potentially reverse the trend of blob fee revenue decline.