Ethereum's revenue fell 33.3% in the second quarter. How did DeFi perform?

Author: Rahul Nambiampurath Source: beincrypto Compilation: Jinse Finance, Shan Ouba

Summary

• In the second quarter of 2023, due to the weakness of the DeFi market, the revenue of the Ethereum network has dropped significantly.
• Average daily active addresses decreased by 6%, and inflation dropped from 0.71% to -0.8%, a drop of 213%.
• Ethereum co-founder Vitalik Buterin proposes a way to simplify crypto wallets.

In the second quarter of 2023, Ethereum network revenue decreased by 33.3% year-on-year. Bankless revealed this data in its report, showing that the average daily active addresses also declined.

Bankless’ report revealed that Ethereum network revenue dropped by a notable 33.3% in the second quarter of the year. Its value fell from $1.27 billion to $847 million.

Ethereum Network Revenue Takes a Hit

The most important statistic in the report is that network revenue fell by 33.3% compared to the second quarter of 2022. Network revenue is the total value of transaction fees paid by users to Ethereum validators, including corresponding burn fees.

The second quarter is a slow season for the DeFi market, which may lead to a decline in network revenue.

Ethereum Network Revenue Declines, Source: Bankless

Another notable statistic is the 6% drop in average daily active addresses on the Ethereum network. Ethereum’s inflation rate has also dropped by 213%, from an average of 0.71% to -0.8%, which means that the growth of ETH supply has slowed down.

While this may not have been the strongest quarter for Ethereum, the network remains the undisputed champion of the DeFi space. In this turbulent year, Ethereum has shown resilience.

Ethereum burns over 146,000 ETH per month

Meanwhile, Ethereum has burned more than 146,000 ETH per month on average, with a total of 3,472,331 ETH burned so far. The total amounted to $6.5 billion. This is a considerable amount since the mechanism was introduced in Ethereum Improvement Proposal (EIP) 1559. Arriving with the London hard fork in August 2021, EIP is responsible for transforming Ethereum into a deflationary network. The vast majority of burns come from typical ETH transfers, NFT activities on major platforms such as OpenSea, and high-volume DEXs.

Ethereum co-founder Vitalik Buterin also recently proposed a way to simplify the use of crypto wallets. This method is similar to using an email ID. Vitalik made these remarks at the Ethereum Community Conference (ETHCC) in Paris.

This method is called modern account abstraction, and Goddess described it as "very elegant". It has the potential to make the wallet recovery process as easy as resetting an account password. While it may still take some time to materialize, there is no doubt that this will help Ethereum’s revenue.