Ethereum December 2024 Update

Fundamentals

Despite the price decrease, Ethereum’s Real Economic Value (REV), which combines transaction fees and tips, saw a 15% increase MoM to $234M. This marks Ethereum’s highest REV since March 2024 when the Blob market was introduced through Dencun. While this is more than almost triple the August low of $85M, it is still far off from the 2024 peak of around $640M in March. REV has shown a continuing upward trend since August, suggesting increased network activity and higher fee generation in tandem with the broader crypto market's recent positive momentum. Below we show Ethereum’s monthly REV over time. 

A breakdown of Ethereum’s REV shows that the vast majority (~65%) comes from Base fees while ~25% stems from priority fees and tips. Notably, blob fees reached as high as 10% of REV albeit for only one day in December. Regardless, the relative importance of blobs continues to grow as more data is demanded by L2s. Below we show the daily breakdown of REV on Ethereum since October 2024. 

The increasing relevance of blob fees stems from the fact that the blob market has been saturated since early November. However, it should be noted that in the upcoming Pectra upgrade (expected in March) the target blobs per block is set to double from three to six which may materially reduce the fees generated depending on demand for data from L2s. Below we show the average blobs per block since October.