Ethereum, Solana and Avalanche processed more onchain activity while charging lower transaction fees over the past year, underscoring a widening split between network use and token market performance. A quarterly staking report from Bitwise said ETH, SOL and AVAX had each fallen more than 50% from their levels a year earlier even as cheaper and more plentiful blockspace supported rising usage.
The data challenges the straightforward assumption that more transactions should automatically translate into higher token prices or greater protocol revenue. On these networks, technical upgrades and fee-market designs have reduced the cost of using blockspace, leaving users with cheaper transactions but token holders with less fee income flowing through the protocols.
Bitwise said Ethereum’s activity increased sharply during the second quarter. The network processed 203.9 million transactions, up from 121.1 million in the comparable period a year earlier, according to figures compiled by Benbrik in the firm’s data update. Average throughput rose from 15 to 26 transactions per second over the same period.
Yet Ethereum’s dollar-denominated fee revenue fell to $64 million from $131 million a year earlier, the report said. Greater capacity appears to have absorbed the additional transaction demand without creating the fee pressure seen during earlier periods of network congestion.
Lower fees reshape the revenue picture
The pattern extended beyond Ethereum. Bitwise said network usage rose across Ethereum, Solana and Avalanche as transactions became less costly, while revenue declined on all three chains. It attributed much of the fall to protocol-level changes that made blockspace cheaper, though weaker demand also weighed on revenue in some instances.
That distinction matters for assessing network economics. Transaction counts measure how frequently a chain is used, while protocol revenue reflects what users pay for that use. A chain can therefore handle more payments, trades and smart-contract interactions while collecting less in fees if it has expanded capacity faster than demand.
For Ethereum, the increase in transactions alongside the decline in fees points to a network operating with less congestion than a year earlier. Lower fees could make smaller transactions and consumer-facing applications more viable, but they also reduce fee-derived returns available to validators and token holders.
Solana and Avalanche face a similar trade-off. Low costs are central to their efforts to attract high-volume applications, yet consistently low fees can limit the revenue generated directly by network activity. The result is a greater focus on issuance-based staking rewards rather than rewards funded by users’ transaction fees.
Ethereum staking reaches a record level
Ethereum’s validator pool continued to expand during 2026, with a record 40.2 million ETH staked at the end of the second quarter, according to Bitwise. That represented roughly one-third of Ethereum’s total supply.
Bitwise said exchange-traded funds, corporate treasuries and other large holders accounted for most ETH added to the validator pool during the year. The growing role of large, long-term holders could make Ethereum’s staked supply less responsive to short-term trading conditions, while concentrating a larger share of validation activity among institutions and treasury managers.
Bitmine separately reported on Monday that it had staked more than 4.9 million ETH from the approximately 5.8 million ETH it holds. The disclosure illustrates the scale at which corporate holders are beginning to participate directly in Ethereum’s validation economy rather than simply holding ETH on their balance sheets.
As more ETH enters staking, the reward available to each validator can decline because the protocol distributes rewards across a larger pool of staked tokens. Bitwise measured Ethereum’s annualized staking yield at 2.84% in the second quarter, compared with 6.25% for Solana.
The yield gap reflects differences in the networks’ reward structures and the amount of supply already committed to staking. It does not by itself indicate which asset offers better returns, since yields are paid in tokens whose market values can change significantly.
Issuance remains the main source of rewards
Bitwise found that newly created ETH accounted for 93% of Ethereum staking rewards during the quarter. More than 90% of Solana staking rewards also came from new token issuance rather than transaction fees.
That composition leaves non-stakers exposed to dilution: as networks issue new tokens to pay validators and delegators, holders who do not receive those rewards own a smaller proportional share of the total supply over time. The effect varies with each protocol’s issuance schedule, burn mechanisms and staking participation rate.
Ethereum’s high staking level also means that a growing share of supply is earning protocol rewards, even though those rewards have become lower on a percentage basis. For traders and holders, the practical calculation increasingly involves weighing staking income against lock-up terms, liquidity needs, validator risk and the price volatility of ETH, SOL or AVAX.
The report’s figures place recent token weakness alongside a more complicated operational picture. Ethereum, Solana and Avalanche have not seen activity collapse; instead, they are processing more transactions under a lower-fee model that reduces the direct financial value captured from each transaction.
That model could support applications requiring frequent, inexpensive onchain actions, including payments, trading and tokenized financial products. Bitwise’s data also shows why rising activity alone may no longer be enough to lift fee revenue or staking yields: capacity improvements have changed how much users must pay to use the underlying networks.
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