Ethereum blockspace on track for first unprofitable month since the Merge

Amid dwindling on-chain activity, Ethereum blockspace dips into negative profitability


leksiv/Shutterstock modified by Blockworks


As on-chain activity plummets, Ethereum’s blockspace is on track to turn a financial loss for the first time since the Merge, according to Blockworks data. 

Data from Blockworks Research’s newly-launched Analytics product shows that Ethereum blockspace has consistently turned a profit since the network’s switch to proof-of-stake consensus in September 2022. 

The blockspace profitability metric is calculated by subtracting the total protocol fees paid to validators as well as ether (ETH) reward issuance from total transaction fees. 

Source: Blockworks Analytics

From October 2022 to present, only in December 2022 did blockspace narrowly turn a loss, generating $3.5 million in losses — a fraction of the $414 million in gains the protocol has seen so far in 2023. 

However, as activity on Ethereum falls, September is shaping up to be the protocol’s first month posting significant losses since proof-of-stake was introduced. Throughout September, Ethereum blockspace has posted only a single profitable day, and as of Monday, has accumulated $15.9 million in losses.

The shift in blockspace profitability coincides with an expansion in ETH’s circulating supply, which is up roughly 8,900 ETH on the month, per data from

The declining profitability for blockspace is attributable to declining user activity and falling volumes across multiple on-chain subsectors. Swaps and transfers of popular stablecoins such as USDT and USDC are down as much as 90% from March 2023 highs, and NFT trading volumes in particular are continuing to dwindle

Source: Blockworks Analytics

While activity on the base layer is shrinking with no clear catalyst to alter the trajectory, a number of Ethereum layer-2 networks are maintaining healthy activity. 

Arbitrum and Optimism both maintain sequencer profitability, and while each has seen pullbacks in the number of active addresses on the networks, they remain close to yearly highs. 

Source: Blockworks Analytics

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. What you can expect: And more! Don’t miss out on the opportunity to be in the room when the future of crypto is decided. Join us and help shape the future of our […]

recent research

Research report - cover graphics-2.jpg


Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as which has seen significant traction.


Certain creditors could be repaid sooner, with one hedge fund exec telling Blockworks it expects a payout by the end of the year


Busan is South Korea’s second largest city with a population around 3.4 million


Cyprus granted eToro crypto registration, setting the groundwork for the company to operate crypto services post-MiCa rollout



These are the best tools and practices you can leverage to defend against crypto market volatility


The agency alleges around 1,160 customers used the margin product, losing about $8.35 million since Oct. 2021.


On Thursday, the Securities and Futures Commission issued a statement disavowing any communication with JPEX saying that the platform is unlicensed