When Ethereum (ETH) surpassed $2,000 on November 9, Erik Smith, the Chief Investment Officer of 401 Capital, noted that the platform’s average daily revenue reached its highest level in four months.
According to data, Ethereum generated $10 million in daily revenue, continuing the gains from the previous day and pushing the metric to its highest point since July.
Ethereum Prices Above $2,000, Revenue Rising In November
Currently, ETH prices remain steady, trading around the November 9 highs and maintaining a bullish formation with decent trading volumes. Prices are still above the critical psychological support level of $2,000.
A look at the Ethereum candlestick arrangement in the daily chart shows that while there is a notable spike in daily revenue, prices are still below the highs of July 2023. The coin reached as high as $2,100 before pulling back, as the momentum triggered by the broader crypto’s expectation of a Bitcoin Exchange-Traded Fund (ETF) approval faded. However, prices have since sharply recovered, adding roughly 40% from October lows and shaking off the weakness registered on August 17 when the coin plunged by 14%.
Token Terminal data shows that Ethereum’s daily revenue has steadily risen in the first ten days of November. The average daily income has doubled from $5 million in the first five days of the month. An increase in daily average revenue in a network usually indicates growing on-chain activity through smart contract deployment or simple transfers, which require the payment of gas fees.
Improving Scalability In The Long Term
The impact of the widespread adoption of Ethereum layer-2 and sidechain scaling solutions on network revenue is not immediately clear. However, it is evident that as more protocols leverage the Ethereum protocol and deploy multiple solutions, the network will generate more revenue for validators and stakers. Staking rewards are derived from transaction fees, new issuance, and burned miner extractable value (MEV).
The dollar value of ETH minted as revenue depends on spot rates. If the uptrend continues, this figure will continue to expand. Nevertheless, there is a growing demand for the network, which is still facing scalability challenges.
Ethereum 2.0 aims to address these challenges in the coming years by increasing the network’s overall throughput through solutions like Sharding. Sharding will divide Ethereum into small interconnected networks called shards. Each shard will independently process transactions and maintain its state, allowing the mainnet to scale.