**Ethereum Network Revenue Plummets Post-Dencun Upgrade**

Ethereum's layer-1 network revenue has nosedived by 99% since March 2024, despite a surge in layer-2 (L2) users and daily transaction costs. Token Terminal data reveals network fees peaked at $35.5 million on March 5, 2024. However, the Dencun upgrade on March 13, 2024, significantly slashed L2 transaction fees.

By August 31, fees dropped to $566,000, slightly rising to $578,000 by September 2. The Dencun upgrade spurred a boom in L2 scaling solutions, with 74 L2 and 21 layer-3 projects now listed. Adrian Brink, CEO of Anoma, claims the market has an excess of L2 solutions, about ten times more than needed.

This fierce competition has driven fees down, reducing demand for Ether (ETH) and increasing its supply. Consequently, ETH prices have dipped below $3,000.