Ethereum staker revenue drops 30% since March peak as onchain activity slows

Ethereum's staker revenue is on a slow descent, with September's total at $174 million, down from its March peak of $247 million. This trend mirrors broader crypto market sentiment.

Staker revenue has been gradually declining since March, reflecting reduced on-chain activity and lower overall market enthusiasm. September's staker revenue of $174 million dwarfs the $35.5 million generated from transaction fees, highlighting a significant reliance on the block subsidy.

The validator landscape continues to expand despite the revenue dip. Ethereum now boasts 1.09 million validators, showcasing growing participation in the network's security. This increase in validators comes even as individual rewards decrease, demonstrating continued faith in Ethereum's long-term prospects.

Ethereum's deflationary mechanism is holding, but there are signs of a reversal:

• Since the Merge, Ethereum has maintained an annual supply burn rate of -0.06%, effectively removing 861,000 ETH from circulation each year.
• However, we've observed ETH supply growth since April as fewer people use the main chain, an observation that might cause the supply to become inflationary. The highest annualized burn rate was recorded on April 5 at -0.38%, and it has been on a steady climb since.
• Indeed, the number of active addresses on Ethereum has also decreased, further suggesting less activity onchain.

As Ethereum navigates these challenges, the balance between rewarding validators and maintaining an efficient, scalable network will be crucial for its continued dominance in the smart contract platform space.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.