On November 9, when Ethereum (ETH) surpassed the $2,000 mark, Erik Smith, Chief Investment Officer of 401 Capital, noted that the platform’s average daily revenue reached its highest point in four months. Data reveals that Ethereum’s daily revenue hit $10 million, building on the momentum from the previous day and marking the metric’s peak since July.
Ethereum’s value surpasses $2,000, with revenue on the rise in November.
Currently, ETH prices remain subdued but hover around the highs seen on November 9, maintaining a bullish formation supported by robust trading volumes. The prices continue to stay above the psychologically significant $2,000 support level, indicating a crucial reaction point.
Examining the daily chart’s candlestick pattern for Ethereum reveals a noticeable increase in daily revenue, yet prices have not surpassed the highs reached in July 2023. During that period, the coin reached a peak of $2,100 before retracing as the broader crypto market’s anticipation of a Bitcoin Exchange-Traded Fund (ETF) approval lost momentum. However, prices have rebounded significantly, surging approximately 40% from October lows and overcoming the weakness observed on August 17 when the coin experienced a 14% decline.
Data from Token Terminal indicates a steady increase in Ethereum’s daily revenue during the first ten days of November. Analyzing the trends, the average daily income has doubled from $5 million in the initial five days of the month. Typically, a rise in daily average revenue in a network suggests a growth in on-chain activity, whether through the deployment of smart contracts or straightforward transfers, necessitating the payment of gas fees.
Enhancing Scalability Over the Extended Duration
The immediate impact on network revenue due to the widespread adoption of Ethereum layer-2 and sidechain scaling solutions is not readily evident. However, it is apparent that as more protocols utilize these solutions, the network’s revenue for validators and stakers will increase. Staking rewards are derived in part from transaction fees, including gas fees, new issuance, and burned miner extractable value (MEV).
The dollar value of ETH generated as revenue is influenced by spot rates, and if the current upward trend persists, this value is likely to expand. Nevertheless, there could be heightened demand for the network, which is currently facing challenges in scaling on-chain.
To address these issues in the coming years, Ethereum 2.0 aims to enhance scalability by increasing overall throughput, employing solutions such as Sharding. Sharding involves dividing Ethereum into interconnected networks known as shards, with each shard autonomously processing a set of transactions and maintaining its state. This approach allows the mainnet to scale more effectively.