Bloomberg’s cryptocurrency analyst, Jamie Coutts, has highlighted that two blockchains have dominated the majority of transaction fees in all smart contracts and Proof-of-Stake (PoS) blockchains over the past 12 months. Ethereum and the Tron Network accounted for 88% of the total transaction fees, with Ethereum leading at 57% and Tron closely following at 31%.
In a statement posted on X on October 7th, Coutts outlined the existence of around 200 smart contracts and PoS blockchains. However, among these 200, most of the transaction fees were on Ethereum and TRON:
“It’s astonishing that 88% of the total transaction fees in the past year came from just 2 chains. This leaves the rest competing for the remaining 12% with ETH L2 gaining market share rapidly.”
Coutts outlined the main challenges that most PoS blockchains face. These challenges include an over-supplied block space, an inflationary supply schedule, undisclosed supply metrics, and auxiliary token systems.
However, despite the market downturn, Coutts asserts that the demand for block space is on a “long-term structural uptrend.”
On the other hand, a recent report showed that Ethereum’s average transaction fees reached their lowest point in 2023. According to blockchain analytics company Santiment, the Ethereum network reduced to $1.15 per transaction on September 24th, the lowest since December 2022.
In contrast, Token Terminal, a blockchain data company, reported in April that Ethereum’s daily transaction fees were significantly higher than TRON’s, despite TRON holding the second position. In the first half of 2023, Ethereum generated $743 million in transaction fees, while TRON generated $282 million.
On the other hand, in the first half of 2023, the Bitcoin network only generated $80 million in fees.
These developments highlight the dynamics and competition within the cryptocurrency ecosystem, with different blockchains vying for market share and user adoption while facing various challenges and fluctuations in transaction fees.