Ethereum Overtakes L2s in Usage with Upgrades Driving Lower Costs

TLDR

• Ethereum reached 791,000 active addresses, surpassing major Layer 2 networks.
• Average Ethereum transaction fees dropped to $0.15, down from $11 in 2025.
• Developers deployed a record 8.7 million smart contracts in Q4 2025.
• The Glamsterdam fork aims to scale Ethereum to 10,000 transactions per second.

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Ethereum is seeing strong user growth following major upgrades like Pectra and Fusaka in 2025. Active addresses have surpassed 791,000, and transaction fees have dropped to an average of just $0.15. Developers deployed a record 8.7 million smart contracts in Q4 2025. With more upgrades planned, including the Glamsterdam fork, Ethereum is moving toward greater scalability, lower costs, and long-term network sustainability.

Activity on Ethereum Surges Ahead of Layer 2 Networks

Ethereum has experienced a major rise in network usage, with active addresses crossing 791,000. This number is higher than that of major Layer 2 networks such as Arbitrum, Base, and Optimism. According to blockchain analytics firm Nansen, this surge in activity marks a 71% increase from the 460,000 active addresses recorded a year ago.

The network is also seeing record-high transaction volumes. On January 13, 2026, Ethereum processed over 2.1 million transactions. This increase comes at a time when average transaction fees have dropped to $0.15, making Ethereum more accessible for regular use.

Lower Fees Driven by Key Protocol Upgrades

Ethereum’s reduced transaction costs follow key upgrades made in 2025. The Pectra upgrade, activated in May, expanded blob capacity. Blobs are data containers used by rollups to store transaction data cheaply. Increasing blob space made it more cost-effective to post data on-chain.

In December, the Fusaka upgrade built on this by introducing Peer Data Availability Sampling. This update allows validators to verify transactions using small samples of data rather than full blobs. The combination of these upgrades has contributed to lower gas fees, which previously reached up to $200 during peak network congestion in 2021 and 2022.

Developers Increasingly Choose Ethereum as a Settlement Layer

The lower fees and improved data availability have made Ethereum more attractive to developers. According to Token Terminal, 8.7 million smart contracts were deployed on Ethereum in the final quarter of 2025. This is the highest number recorded to date, indicating growing trust in Ethereum’s base layer for decentralized application development.

While other Layer 1 chains like Solana and BNB Chain still lead in total transaction numbers, Ethereum’s upgrades and ongoing development efforts have started to close the gap. Ethereum is being used more as a settlement layer, while Layer 2s and other blockchains handle some of the execution workload.

Long-Term Upgrades Aim for Independence and Scale

Ethereum co-founder Vitalik Buterin has said the goal is for Ethereum to reach a stage where developers can eventually walk away. On social platform X, Buterin wrote that “Ethereum must pass the walkaway test” by becoming fully self-sufficient. This includes making the protocol quantum-resistant and scalable while preserving decentralization.

Upcoming network changes aim to address these challenges. The Glamsterdam fork, expected in 2026, will introduce perfect parallel processing and raise the gas limit from 60 million to 200 million. This will allow for larger block sizes and increased throughput. Developers estimate the network could reach speeds of up to 10,000 transactions per second after the fork.

Ethereum’s roadmap also includes long-term changes to its proof-of-stake system, block-building model, and account structures. Each upgrade aims to enhance the blockchain’s durability and prepare it for the future.

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