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The Ethereum Q2 2023 Report

Today, we dig into one not-so-simple question: How is Ethereum doing?
William M. Peaster William M. Peaster Jul 19, 20238 min read
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The Ethereum Q2 2023 Report

Dear Bankless Nation,

Today, we dig into one not-so-simple question: How is Ethereum doing?

Below, we've presented a digestible deep dive into Ethereum's financial performance over Q2 2023, unpacking the metrics that matter most in judging the growth of Ethereum at the protocol-level and in its various ecosystems.

- Bankless team


We’re now halfway through 2023, and Ethereum has been showing considerable resilience amid the ongoing cryptoeconomy 🐻 market compared to other alt-L1s. The below report examines top-line metrics for the second quarter of 2023 (ending June 30th) for the Ethereum network and its ecosystem as broken down into four categories:

🟦 Protocol
🟩 DeFi Ecosystem
🟥 NFT Ecosystem
🟪 Layer 2 Ecosystem

After digging into the above, we’ll then move you through our top ecosystem highlights and our forward outlook for the protocol. The full ETH Q2 2023 Report is available only to paying subscribers of Bankless.

These numbers compare Ethereum’s performance in Q2 2023 against Q2 2022.

🟦 Protocol


🟦 Network revenue dropped 33.3% from $1.27B to $847M. The USD value of ETH burned fell 35% from $1.09B to $713M

Ethereum’s total fees earned (green) and ETH burned (purple) - via Token Terminal

Network revenue measures the total value of transaction fees paid by users to Ethereum validators, as well as the portion of said fees that is burned (i.e. removed from the circulating supply of ETH via EIP-1559 burning).

Considering the bearish conditions we’ve seen in crypto in recent months, it’s somewhat surprising that there wasn’t a larger revenue decline year-over-year. Ethereum has held up well activity-wise in this regard. That said, the decline we’ve seen here still showcases the bearish conditions lately. As demand for blockspace has dropped, so have Ethereum’s earnings and burnings for now.

🟦 ETH Inflation Rate decreased 213% from 0.71% to -0.8% on average

ETH supply growth - via Etherscan

The ETH Inflation Rate tracks the growth in overall supply of ETH over the course of the quarter. This growth rate turned negative as the EIP-1559 fee burning mechanism is now chugging along at full steam ahead.

🟦 Average daily active addresses declined 6% — from 471,447 to 444,419

Ethereum daily active addresses - via Etherscan

This metric tracks the average number of wallet addresses to transact on Ethereum each day over the duration of the quarter. As with network revenue, it’s fairly surprising this figure hasn’t dropped further amid the current bear market.

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William M. Peaster

Written by William M. Peaster

638 Articles View all      

William M. Peaster, Senior Writer, has been with Bankless since January 2021. Immersed in Ethereum since 2017, he writes the Metaversal newsletter on the onchain frontier, covering everything from AI projects to crypto games, as the team’s lead NFT analyst. With a background in creative writing, he writes fiction and publishes art on Ethereum in his free time. He lives in Washington.

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