Ethereum Solana and Avalanche Revenue Falls as Onchain Activity Grows Today

TLDR

Table of Contents

Ethereum, Solana and Avalanche became busier and cheaper while ETH, SOL and AVAX prices declined.
Bitwise said cheaper blockspace reduced network revenues despite higher onchain activity across smart contract chains.
Institutional holders drove most new Ethereum staking inflows as validator participation reached 40.2 million ETH.
Ethereum staking yield reached 2.84%, while Solana posted 6.25% during the second quarter period report.
New token issuance funded most staking rewards, creating dilution risk for holders who avoid staking.

Ethereum, Solana, and Avalanche have recorded more blockchain activity and lower transaction costs over the past year, even as ETH, SOL, and AVAX remain down by more than 50% from year-ago levels.

Network Activity Rises While Token Prices Fall

Bitwise Head of Onchain Research Kam Benbrik said the market has created a wide gap between blockchain usage and token prices. He said network fundamentals have improved, even though prices remain far below 2025 levels.

“We’ve seen a big divergence between network fundamentals and market sentiment because, obviously, prices are down compared to 2025,” Benbrik said. He added that blockchains are becoming cheaper while onchain activity increases.

Ethereum, Solana, and Avalanche have all seen activity grow as users pay lower fees to transact. The trend suggests networks are handling more activity while offering cheaper blockspace to users.

However, the lower fees have also reduced network revenue. Bitwise said revenues fell sharply across Ethereum, Solana, and Avalanche during the same period.

Cheaper Blockspace Cuts Network Revenue

Bitwise said the revenue decline came mainly from protocol design choices. Networks made blockspace cheaper and more available, which reduced the amount users paid for transactions.

“The decline in revenue was driven mainly by protocol design, as networks made blockspace cheaper and more abundant,” Bitwise said in its report. The firm added that weaker demand affected some cases but was not the wider trend.

The report shows a mixed picture for major smart contract networks. Lower costs can support user growth and application activity, while weaker revenue can pressure fee-based value models.

That divide has become more visible as token prices fall despite higher blockchain usage. ETH, SOL, and AVAX have each dropped by roughly half or more compared with a year ago.

Institutional Staking Grows on Ethereum

Bitwise also pointed to rising institutional involvement in staking. The firm said ETFs, corporate treasuries, and other large holders accounted for most ETH added to the validator pool this year.

Ethereum had a record 40.2 million ETH staked at the end of the second quarter. That amount represented about one-third of the cryptocurrency’s total supply.

“When we looked at where the inflows are coming from onchain, they’re really coming from institutions,” Benbrik said. The comment reflects the growing role of large holders in Ethereum staking.

Bitmine also said on Monday that it was staking more than 4.9 million ETH from its total holdings of about 5.8 million ETH. The company is the largest Ethereum-based treasury.

Staking Yields Face Dilution Pressure

Bitwise reported Ethereum’s annualized staking yield at 2.84% in the second quarter. Solana’s annualized staking yield stood higher at 6.25% during the same period.

However, newly issued tokens made up most staking rewards on both networks. Bitwise said issuance accounted for 93% of Ethereum staking rewards and more than 90% of Solana rewards.

That structure means non-staking holders may face dilution as new tokens enter supply. Higher staking participation can also spread rewards across more validators, pushing yields lower.

Benbrik said some clients stake to earn yield and support network security. He also said liquid staking lets users keep exposure to staking rewards while using tokens in DeFi for liquidity, deposits, and borrowing.