If current market dynamics continue, driven primarily by activity in the decentralized finance (DeFi) sector, the Ethereum blockchain could exceed $1 billion in 2024.
Michael Nadeau, Analyst at The DeFi Report, published a paper titled “The Ethereum Investment Framework,” which analyzes the performance of the largest altcoin’s blockchain in Q1 2024 and forecasts the organization’s financial prospects for the current year.
In Q1 2024, Ethereum’s net earnings reached $365 million, which is almost 200% higher than in Q4 2023, when the revenue amounted to $123 million. The total amount of funds received as fees reached $1.17 billion, up 155% from Q1 2023 and an 80% increase from the previous quarter.
According to the analyst, the reason for the revenue growth was increased network activity, primarily in the DeFi sector. Current activity on the Ethereum network is approaching its peak in 2021, when just under 1.25 million transactions were made. If ongoing market dynamics continue, Ethereum’s profits could exceed $1 billion in 2024.
The report notes that the organization profited for the first time just last year. In 2023, Ethereum’s profit was $623 million, although the organization’s revenues were 75% lower than in 2021, when they reached an all-time high of $9.9 billion. The analyst attributes the profitability to the transition to the Proof-of-Stake consensus algorithm, after which the cost of adding blocks dropped by 80%.
In 2024, the Ethereum network successfully carried out the hard fork Dencun, which reduced the transaction fees in L2 protocols. Now, the project developers started preparing for the Pectra hard fork, which will allow users to avoid losing access to their assets and create conditions for crypto wallets to work as smart contracts.
