In contrast to popular belief, Ethereum‘s decentralized network has managed to generate earnings this year, as shown in the figures so far.
Based on a report from Token Terminal released on April 18, Ethereum’s blockchain earned approximately $369 million in profits during the first three months of the year 2024.
Maintaining these profits, the blockchain has the potential to yield approximately $1.5 billion in earnings for the year.
BREAKING: The Ethereum blockchain generated a $369.08M profit in Q1 ‘24.
Wait, what?!
How can a *blockchain* like @ethereum be profitable?
Let’s go through Ethereum’s business model step-by-step:
1. Fees. All users on the Ethereum blockchain pay transaction fees in ETH…
— Token Terminal (@tokenterminal) April 18, 2024
Ethereum Blockchain Profitable
Token Terminal explained that Ethereum’s revenue model is based on network fees, which are the gas users pay for making transactions. Gas costs spiked in early March but have now fallen back to yearly lows.
In addition, each Ethereum transaction results in a small amount being destroyed and taken out of circulation. This has a positive effect on current Ethereum owners as it leads to a decreased supply during periods of increased demand, making it scarcer and potentially more valuable.
An extra reward in the form of newly issued ETH goes to the network’s validators and stakers, in addition to covering costs (referred to as “expenses”).
In simpler terms, the amount of Ethereum in US Dollars that is generated each day by burning Ethereum (earnings) minus the Ethereum created and issued daily (costs), equals the profit for current Ethereum owners.
Ryan Sean Adams, a well-known crypto investor and Ethereum supporter, expressed his view that Ethereum stands out among other blockchains. In the past 18 months alone, Ethereum has produced nearly a billion dollars in profits for him.
Based on its buyback yield of 0.23%, Ethereum ranks among the top 20 entities globally. Keep in mind that Ethereum is just nine years old. Using this metric alone, one could argue that ETH‘s price should be over $10k.
No, ethereum isn’t like the other chains.
Ethereum is profitable.
Over the past 18 months Ethereum generationed almost $1 billion in earnings.
These earnings were distributed in a permanent token buy-back program called “the burn”.
This puts Ethereum in the top 20 entities…
— RYAN SΞAN ADAMS – rsa.eth (@RyanSAdams) April 18, 2024
On April 19th, Tomasz Tunguz, a venture capitalist with a following of 98,000 on X, announced to his audience that Ethereum had generated the greatest profit among all software companies during the first quarter of 2024.
Ethereum earned a net income of approximately 45%, translating to a profit of around $370 million from total revenues of $825 million.
“Should Ethereum be listed on the New York Stock Exchange or NASDAQ, it would lead in net income margins, surpassing those of Microsoft, Adobe, and Veeva.”
ETH Price Slides
Despite this, the price of Ethereum dipped below $3,000 for the first time in two months during the previous night.
Instead, the market situation shifted in the subsequent hours, causing ETH to rebound and reach approximately $3,100 at present.
Despite reaching a 2024 peak, the value of the asset has since dropped by approximately 25%. Additionally, it is currently 38% lower than its previous all-time high in 2021.
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2024-04-19 22:15