Ethereum transactions activity on the world’s second-largest blockchain has climbed to record levels as average fees fall to their lowest point in years, according to on-chain data published in mid-January 2026.
The shift highlights a rare convergence of rising usage, declining costs, and steady staking participation on Ethereum, even as co-founder Vitalik Buterin cautions against overcomplicating the protocol. The trend is unfolding globally, driven by payments, stablecoin transfers, and Layer 2 scaling upgrades, and reflects Ethereum’s ability to handle growing demand without sacrificing operational stability.
Record Ethereum transactions activity and falling fees
Recent data from open-source blockchain explorer Blockscout shows Ethereum transactions activity has surpassed its previous peak from the 2021 market cycle.
Over the past two weeks, average daily transactions rose by about 14%, increasing from roughly 1.8 million to 2.1 million transactions per day. At the same time, average transaction fees have dropped to a fraction of their historical norms, reaching levels last seen several years ago.
This combination of higher throughput and lower cost marks a significant milestone for the network. Ethereum transactions activity has often surged during speculative bull markets, but those periods were typically accompanied by congestion and high fees. The current phase, by contrast, suggests that recent protocol upgrades are allowing the network to absorb more usage without the same trade-offs.
“This simultaneous rise in throughput and fall in cost reflects the success of Ethereum’s modular scaling architecture, particularly EIP-4844 and its recent blob-capacity upgrade, which allows Layer 2s to post more data to mainnet at far lower cost,” — Dosh, Head of Business Development and Growth, Blockscout.
The EIP-4844 upgrade, also known as proto-danksharding, enables rollups to move bulk data off the Ethereum main chain while still anchoring security on it. As a result, Ethereum transactions activity increasingly reflects real usage rather than congestion-driven spikes.
Stablecoin demand driving Ethereum transactions activity
Much of the current Ethereum transactions activity is being fueled by stablecoin transfers and payment use cases rather than speculative trading. According to Blockscout’s analysis, Tether’s USDT accounts for roughly twice the transaction volume of Circle’s USDC on the network, making it the dominant driver of on-chain payments.
“Most of the usage comes from stablecoin transfers and payments, led by Tether’s USDT at roughly twice the volume of Circle’s USDC,” — Dosh, Head of Business Development and Growth, Blockscout, said.
Low gas prices appear to be reinforcing this trend. With transaction costs remaining subdued, payment flows on Ethereum have become more predictable and accessible, particularly for Layer 2 networks that settle back to mainnet.
“With gas prices remaining low, this activity appears highly durable, aligning with the broader trend of mainstream payment integrations expanding across Ethereum-based rails,” — Dosh, Head of Business Development and Growth, Blockscout, added.
Analysts say this pattern suggests Ethereum transactions activity is becoming structurally more resilient, tied to everyday financial activity rather than short-term market cycles.
Validator confidence and staking stability
Alongside rising Ethereum transactions activity, staking data points to growing confidence among validators. Roughly 30% of all Ether in circulation is now staked, and the validator exit queue has dropped to zero, according to data from Ethereum Validator Queue and the Beacon Chain.
The exit queue measures how many validators are waiting to leave Ethereum’s proof-of-stake system and withdraw their funds. When the queue is empty, it indicates that validators are not rushing to exit, a sign that staking rewards and operating costs are broadly balanced.
Validator exits have declined from a peak of about 2.67 million ETH in September 2025 to zero, while approximately 2.6 million ETH is currently queued to enter staking, the highest level since July 2023. Because validators must signal their intention to exit well in advance, these metrics are closely watched as indicators of long-term confidence in the network.
“Virtually no validator exits suggest a balance between operating costs and staking rewards, a sign of stability and confidence,” — Dosh, Head of Business Development and Growth, Blockscout, said.
“It also implies that stakers are accumulating rather than exiting, keeping capital committed and liquid for future flexibility in higher-volatility environments.”
This backdrop of staking stability reinforces the durability of Ethereum transactions activity, as validators remain committed even as usage patterns evolve.
Buterin warns against protocol bloat
Despite the positive data, Ethereum co-founder Vitalik Buterin has raised concerns about the long-term risks of adding too many features to the protocol. Writing on Sunday, Buterin cautioned that complexity could undermine Ethereum’s resilience if not carefully managed.
“One of my fears with Ethereum protocol development is that we can be too eager to add new features to meet highly specific needs, even if those features bloat the protocol or add entire new types of interacting components or complicated cryptography as critical dependencies,” — Vitalik Buterin, Co-founder, Ethereum, wrote.
Observers interpret the warning as a governance signal rather than an immediate performance concern. Ethereum transactions activity may be strong today, but maintaining that momentum over the long term could depend on keeping the protocol understandable and maintainable.
“Every mature software system accumulates some complexity, and Ethereum is no different,” Dosh, Head of Business Development and Growth, Blockscout, said. “While such ‘bloat’ doesn’t hinder current performance, it makes continued optimization essential.”
As Ethereum transactions activity continues to expand, the challenge for developers and the broader community will be balancing sustainable scaling with sustainable simplicity, ensuring the network remains adaptable in future market cycles.
