Ethereum (ETH) is trading close to $1,870 as recent network enhancements have doubled transaction throughput and slashed mainnet fees significantly, improving its usability but raising questions about long-term value capture amid increasing competition.

Network Upgrades Drive Efficiency Gains

A 2026 study revealed that Ethereum's latest upgrades introduced "blobs," a dedicated data capacity that reduced transaction costs for Ethereum-based rollups like Arbitrum, Base, and Optimism. Median transaction fees on the mainnet dropped from over $2 to under $0.02, while layer-2 fees fell by more than 95%. These improvements have expanded Ethereum's capacity to handle decentralized finance, stablecoins, tokenized assets, and blockchain applications more efficiently.

Since July 2024, spot Ethereum ETFs have been available in the US market, providing mainstream investors access to the cryptocurrency via brokerage and retirement accounts. also Ethereum operates on a proof-of-stake consensus mechanism, enabling holders to earn staking rewards by securing the network, which differentiates it from Bitcoin.

Competition and Challenges in Value Capture

Ethereum faces notable competition from blockchains like Solana, which offer faster transactions and lower fees without requiring users to manage multiple layer-2 solutions. Research from 21Shares indicated that Solana generated about $2.85 billion in revenue between October 2024 and September 2025, underscoring its growing ecosystem.

Despite layer-2 improvements enhancing user experience, lower fees on these networks decrease the transaction fee revenue flowing back to Ethereum's mainnet. This dynamic raises concerns that Ethereum could support a large digital economy without a proportional rise in ETH's price. plus researchers have highlighted centralization risks among Ethereum block builders, which may impact the network's decentralization.

ETH remains a highly volatile asset that has historically underperformed Bitcoin during certain market cycles.

Material is informative and does not constitute financial advice.