Key notes:
- Ethereum (ETH) DApps generated $1.021 billion in Q1 2025, leading all blockchains in fee revenue.
- Despite EIP-1559, ETH was net inflationary: 4.2K burned vs. 77.9K issued.
- High gas fees and rising competition challenge ETH’s dominance, but fundamentals remain strong.
Ethereum Tops DApp Revenue Charts
According to data from Token Terminal, ETH DApps generated over $1.021 billion in fees in Q1 2025, far surpassing rival networks. Base (Coinbase’s Layer-2) ranked second with $193 million, followed by BNB Chain ($170 million), Arbitrum ($73.8 million), and Avalanche C-Chain ($27.68 million).
ETH’s active DApp ecosystem includes top DeFi protocols like Uniswap and Aave, NFT marketplaces like OpenSea, and a growing base of on-chain games and social apps. It remains home to over 4,900 active DApps, with a DeFi total value locked (TVL) exceeding $46 billion, according to DefiLlama.
Revenue Burn Supports Long-Term Value — But Not Always
EIP-1559, introduced in August 2021 during ETH’s London upgrade, changed how it handled fees. A part of every transaction fee (called the base fee) is burned, reducing the overall ETH supply. Users can still add a tip to speed things up. This system helps control fees and supports ETH’s long-term value. But when activity is low, more ETH can be issued than burned, leading to short-term inflation.
At the time of writing, Ultra Sound Money data shows ETH supply surged last 30 days: only over 4K ETH burned vs. over 77K issued to validators, resulting in a substantial net supply increase
This demonstrates that burn mechanisms alone aren’t always enough to keep ETH deflationary unless network usage remains consistently high.
Ethereum: Costly, But Leading in Security and Tokenization
ETH remains over 50% below its YTD high, even as on-chain activity grows. Because of high gas fees, retail users are migrating to cheaper Layer-2s and faster chains like Solana.
JP Morgan analysts cite rising competition and ETH’s weaker narrative compared to Bitcoin. But its cost reflects a design choice prioritizing decentralization and security. That’s why ETH leads in real-world asset tokenization, securing over $8 billion.
As Vitalik Buterin said, “Privacy is an important guarantor of decentralization.” Institutions trust ETH because it’s resilient, secure, and hard to compromise.
Outlook: Fundamentals Strong, Sentiment Cautious
Ethereum continues to lead in DApp revenue and real-world asset tokenization, securing over $8 billion in tokenized value. However, its broader on-chain fundamentals are facing headwinds. High gas fees, rising ETH issuance, and increasing competition from faster, low-cost chains like Solana are beginning to erode its near-total dominance. While Ethereum’s long-term model of validator yield and fee burn remains compelling, sustained leadership will depend on its ability to scale effectively and retain developer and institutional trust in a maturing multi-chain environment.
