Ethereum’s Network Is Booming, So Why Is ETH Still Underperforming?

On-chain data shows that the Ethereum blockchain has developed a lot in the past few years, currently processing more activity than ever before.

At the same time, the underlying asset has failed to benefit, as it continues to struggle below $2,000. One analyst believes this disconnect has become one of the biggest debates surrounding the altcoin and the network behind it.

Ethereum Activity Rockets

Aside from the highly anticipated Merge upgrade deployed several years ago, the team behind Ethereum has completed several other, perhaps less hyped but similarly impactful updates over the years that have managed to scale the network. The blockchain is seemingly handling significantly more activity than it did during its proof-of-work years.

Data shared by popular analyst Tanaka claims that Ethereum’s layer-1 generated over $88 million in Real Economic Value (REV) during Q2, up 7% from the previous quarter. However, it’s still down by nearly 70% year-over-year.

Applications built on the world’s second-largest blockchain generated $1.8 billion in fees, meaning that Ethereum itself, which recently celebrated its 11th birthday, captured only around 4.9% of the economic value created by its application layer. The contrast becomes even more apparent when examining the network activity.

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