A Messari analyst sparked intense discussion over the weekend by claiming that Ethereum is "in decline," citing a drop in its network revenue in August.
Messari research manager AJC posted on the X platform on Saturday, stating that "Ethereum's fundamentals are collapsing," with Ethereum's transaction fee revenue in August amounting to $39.2 million, a year-on-year decrease of over 40% and a month-on-month decrease of about 20%.
However, many industry insiders disagree with this view. They point out that several metrics for Ethereum continue to improve, including application revenue, stablecoin supply, Layer 2 scaling progress, and Ethereum's positioning as a commodity rather than a tech stock—indicating that its value should not be measured solely by revenue.
The decline in Ethereum's revenue is largely attributed to the Dencun upgrade in March 2024, which reduced transaction fees when submitting transactions to Layer 2 scaling networks as a base layer.
Henrik Andersson, Chief Investment Officer of Apollo Crypto, stated in an interview with Cointelegraph that the claim of Ethereum "in decline" is unfounded, as Ethereum L2 analysis tool growthepie shows it remains "a vibrant ecosystem, with stablecoin supply, network throughput, and active addresses at or near historical highs."
According to investment research platform YCharts, as of August 30, the number of daily active addresses on Ethereum exceeded 552,000, a 21% increase compared to the same period in 2024.
Andersson remarked, "We believe that both Ethereum and Bitcoin (BTC) are indispensable in a crypto asset portfolio."
In response to criticism, AJC defended his approach of evaluating L1 blockchains based on revenue. He explained that since this revenue is denominated in Ether (ETH), which was once a major driver of consumption demand, this metric is "approaching zero" now.
At the same time, AJC believes that active addresses and transaction counts "are meaningless in measuring demand."
According to Ethereum Obituaries, since 2014, Ethereum has been declared "dead" at least 150 times, with about 40 of those declarations occurring this year.
Ryan McMillin, Chief Investment Officer of Merkle Tree Capital, told Cointelegraph that Ethereum continues to adapt to changes, but it is often declared "dead" whenever the narrative weakens, transaction fees drop, trading volume declines, or competitors surpass it.
He stated that theoretically, due to fierce competition in the smart contract space, developers and capital may gradually but permanently shift to other platforms.
"However, in reality, its developer community, mature DeFi protocols, and compliance make Ethereum more resilient than the obituaries suggest. The current mainstream view is that Ethereum will become the preferred public chain for TradFi, although Solana (SOL) ETFs may also pose a challenge," McMillin said.
McMillin expressed that he does not believe Ethereum is "in decline," but admitted that it has been in a "predicament" for the past two years, caught between Bitcoin (BTC) as digital gold and Solana (SOL) as a faster, cheaper alternative.
"The positioning of Ethereum as 'ultrasound money' cannot compete with Bitcoin's (BTC) stronger monetary premium, while Solana (SOL) offers an order of magnitude improvement in network throughput and cost," he said.
McMillin also pointed out that a significant factor driving Ethereum's development in 2025 will be its spot ETFs, which open the door for traditional financial inflows and position Ether (ETH) as a leveraged investment target for stablecoin adoption and network growth.
Related: Due to censorship concerns, Ordinals developers propose forking Bitcoin Core
Original: “Current Ethereum (ETH) Key Metrics Show Polarization”
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