Crypto network fees and revenue are good indicators of the state of markets. In bull markets, demand is high, and fees and revenue increase, however, the opposite occurs when the bears have control of things.
About six months into the current bear market cycle, many of the crypto network’s earnings have fallen below the prices of the assets themselves.
This pattern has been observed by the founder of Crypto Pragmatist, Jack Niewold, on June 7, who revealed why he thinks Ethereum remains the king of the crop.
Ethereum is the king of fees
With network fees in mind, Ethereum became unusable for the average person in November and May when gas prices soared into triple digits. However, some were still willing to pay that much to use the network, which speaks to the demand for Ethereum block space.
“Ethereum blockspace is a premium product: something that goes after the highest-end, those customers that are most willing to pay at any price. Just look at the BAYC land sale.”
Niewold observed that alternative Layer 1 networks do not benefit from this fee reflexivity “because their competitive advantage is extinguished in times of low activity”.
He used Solana as an example which has seen value moved on-chain crushed over the past couple of months. Five outages this year have also been a detriment to Solana, which was once believed to be an “Ethereum killer.”
As a result, alternative diaper 1s may be overpriced, he added, or they could be “valued on potential, not activity.”
Fee Pigs
A Token Terminal chart was used to illustrate the top ten “fee pigs” over the past six months. They all managed to cross $10 million in daily revenue during the bull cycle peak but are struggling to reach $1 million at the moment. The conclusion was pretty clear:
“And Ethereum, as always, remains king.”
Ethereum’s average daily fees over the past week have been just over $10 million per day, according to Cryptofees.
However, the channel’s bullish metrics have not been reflected in the prices of the underlying asset, as the selloff continues.
Ethereum has dumped 6% over the past 24 hours in a fall to $1,750 at the time of writing, according to CoinGecko. The world’s second-largest crypto has lost 12% over the past week and is now down 64% from its November all-time high.
