Crypto Moda Daily Market Report — September 8, 2025
In a surprising twist, Ethereum’s protocol revenue fell a staggering 44% in August, even as the price of ETH soared to record highs, according to TradingView data. This decoupling between price performance and protocol income raises fresh questions about the health of the Ethereum ecosystem and the sustainability of its current valuation.
📊 What's Going On?
Ethereum reached new all-time price levels in August, driven by ETF inflows, optimism around Layer 2 scaling, and institutional interest. But behind the bullish charts lies a concerning data point: protocol-generated revenue collapsed from over $280 million in July to just $157 million in August.
This marks one of the steepest month-over-month declines in Ethereum’s post-Merge era.
🔍 Why the Drop?
Several factors contributed to the drop in revenue:
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Lower Network Activity: Despite high ETH prices, on-chain activity didn’t keep up. Fewer swaps, mints, and transfers meant fewer gas fees collected.
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Layer 2 Migration: Many users have moved to Layer 2s like Arbitrum and Base, which reduce fees paid directly to the main Ethereum network.
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Gas Optimization: Wallets and protocols continue to improve gas efficiency, which ironically reduces Ethereum’s own fee income.
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Speculative Pause: As memecoin and NFT hype cools off, short-term traders are less active, further reducing demand for blockspace.
💡 What It Means for Investors
While price and protocol revenue don’t always move together, this divergence could be a red flag. Ethereum’s long-term value relies on real usage and economic activity, not just speculative flows. Investors should keep a close eye on daily active users, total value locked (TVL), and developer activity — not just the ETH price.
Still, Ethereum remains the most actively developed blockchain and continues to dominate in DeFi and Layer 2 scaling infrastructure.
🧠 Final Thoughts
Ethereum’s price may be flying high, but this revenue drop is a reminder: fundamentals still matter in the long run.