In 2023, Ethereum mainnet fees experienced a significant 44% decrease, indicating a notable shift towards more cost-effective Layer 2 scaling solutions.
A report from P2P lending protocol PWN reveals that Ethereum’s Layer 2 ecosystem, especially led by Arbitrum and Optimism, witnessed a surge in network fees, with Arbitrum experiencing a remarkable 190% increase, and Optimism seeing a 103% rise. Overall, the Layer 2 ecosystem observed a substantial 400% surge in fees from 2022 to 2023, post the Merge.
As fees on Layer 2 platforms soared, Ethereum’s mainnet witnessed a notable 44% reduction in generated fees, surpassing the average decline for all Layer 1s. The data suggests a widespread migration of users towards Layer 2 solutions, a trend further accelerated by the transition to Proof-of-Stake.
Among Layer 1s, Bitcoin, fueled by the Ordinals ecosystem, exhibited the highest growth with a remarkable 461% increase in generated fees.
In the realm of decentralized finance (DeFi) and non-fungible tokens (NFTs), decentralized exchanges (DEX) experienced a 51% decline in total fees generated in 2023. Uniswap, commanding 64% of the entire fee market, led the sector with $871 million generated. Despite a threatening hack in late November, KyberSwap was the sole DEX that witnessed growth in its fee market, boasting a 73% increase.
Lending platforms demonstrated a mixed performance, with the entire sector experiencing a 36% decline in fees. Aave, the market leader, mirrored this decrease. However, within the category, 50% of platforms witnessed a drop, while the remaining 50% showed an increase. Radiant emerged as the top performer, generating 479% more fees compared to 2022.
The NFT marketplace sector faced challenges during the crypto winter in 2023, with fees plummeting by 87%, despite a remarkable 2,718% rise for Blur.
Stablecoins are poised for growth in the coming year, with USDC set for a resurgence after a challenging 2023. It recorded its first net supply increase since the Silicon Valley Bank collapse, marking a $1.23 billion rise over the year.