Ethereum on-chain activity rebounds, trading volume hits new highs, signaling a positive shift in fundamentals

By the end of 2025, the on-chain ecosystem of Ethereum has shown a clear rebound in activity. According to on-chain data, last Friday, the number of daily transactions on Ethereum surpassed 2.885 million, setting a historic new high. This not only signifies a strong recovery in trading activity but also reflects that the entire network is gradually signaling sustained improvement in its fundamentals after a period of adjustment.

It is worth noting that for most of 2025, on-chain transaction activity on Ethereum exhibited a mild downward trend until mid-December, when a noticeable increase in transaction volume occurred. In the recent period, trading activity has accelerated even further, with on-chain transaction counts continuously hitting new records, demonstrating a rapid recovery in market demand.

Transaction volumes surge but fees remain low, network efficiency significantly improved

Behind this sharp increase in transaction counts, an impressive phenomenon is that Ethereum’s Gas Fees have remained relatively low, without the fee spikes seen during previous bull markets. This reflects a fundamental change in the Ethereum network.

Through multiple rounds of technological upgrades in recent years and the widespread adoption of Layer 2 solutions, Ethereum can now absorb explosive growth in usage more smoothly and efficiently. Layer 2 solutions divert a large volume of transactions to sidechains, effectively alleviating mainnet congestion. As a result, even as transaction counts rise, network congestion on the main chain has been significantly improved. This indicates that Ethereum’s network architecture has shifted from simple load-bearing to layered optimization, resulting in a qualitative leap in user experience.

Validator exit queue has been cleared, staking market remains steadily growing

In the staking market, data also conveys positive signals. The validator exit queue on Ethereum has been cleared, meaning that investors wishing to unstake and redeem ETH can now do so “instantly,” without waiting for an exit period. This is a stark contrast to the past when exit congestion caused queues.

In sharp contrast, investors eager to “enter” and participate in staking are still lining up. According to ValidatorQueue monitoring data, over 36 million ETH are currently locked in staking contracts, accounting for approximately 29.8% of the circulating supply (based on the latest circulating supply of 120 million ETH). More importantly, over 2.5 million ETH are queued to join staking, reaching the highest level since August 2023.

This phenomenon of “high enthusiasm for entry and smooth exit queues” fully reflects market confidence. Investors are not panicking and withdrawing due to market volatility; instead, they feel secure holding and locking assets in Ethereum for the long term. This itself is a positive market signal.

From deflationary narratives to application value, Ethereum’s investment logic is shifting

This combination of “high transaction volume, low fees, and smooth staking exits” is undoubtedly a major victory for user experience. However, from an investment perspective, the deeper implications are worth pondering.

In the past, the popular deflationary narrative of “fee surges → ETH burns in large quantities → supply becomes scarce” was a key argument driving ETH’s value. However, with the maturity of Layer 2 solutions and network efficiency improvements, this “high fee → deflation” pathway is gradually weakening. Instead, Ethereum’s real application value as a “global settlement layer” is beginning to emerge.

Ethereum’s ultimate value is shifting from supply-side scarcity to demand-side real-world application. When on-chain transactions surge while fees remain low, what is truly validated is not supply scarcity but Ethereum’s core position and irreplaceability within the global financial infrastructure.