Ethereum price slides to $3,060 as Layer‑2 activity siphons fees

Ethereum slipped to about $3,060 on November 1, 2025 – roughly a 38% decline from its August 24 high of $4,953 – as Layer‑2 scaling solutions diverted transaction volume and fee revenue away from the base chain, raising doubts about ETH’s long‑term price model [1].

Layer‑2 growth and fee erosion

Layer‑2 rollups now dominate Ethereum activity. Arbitrum processes about 3.4 million daily transactions and secures nearly $20 billion in locked value, while Optimism handles close to 1 million daily tx and Base – Coinbase’s network – drives roughly 8 million daily transactions, most of which bypass the main chain [1]. This off‑chain traffic has slashed main‑net gas fees by almost 99%, pushing average fee rates to a record low of 0.067 Gwei and reducing daily ETH burns to roughly 100 ETH – a stark contrast to pre‑Dencun days when daily burns topped 30 million USD and fees regularly exceeded $30 million [1].

The fee collapse turned Ethereum’s inflation from negative to slightly positive, eroding the scarcity narrative that many investors rely on. Coinbase’s Base alone generated over $94 million in profit but contributed only $4.9 million in blob fees to the mainnet, illustrating how value is being retained on L2s rather than flowing back to ETH holders [1].

Tokenomics and staking resilience

Despite the fee squeeze, Ethereum’s supply dynamics remain supportive. About 35% of the total ETH supply – roughly 30% of circulating ETH – is staked, earning 3‑4% annual yields, with Lido alone holding around 41 billion staked ETH [1]. Since the Merge, the network has burned roughly 350,000 ETH, providing a modest deflationary pressure that offsets the reduced fee burns.

However, the shift in revenue streams has already prompted analysts to lower price targets, citing the weakened fee‑burn mechanism as a key risk factor. Institutional flows in October showed notable ETH outflows, with firms like BlackRock trimming exposure, suggesting that the reduced on‑chain revenue may dampen future capital inflows [1].

What to watch

• $3,500 resistance – a break above could signal a rebound toward the August peak.
• Upcoming L2 unlocks – monitor any large‑wallet withdrawals from Arbitrum or Base that could re‑inject value onto the main chain.
• Regulatory or ETF decisions – any approval of Ethereum‑linked ETFs in Q4 2025 could provide fresh institutional demand.

Ethereum’s price now hinges on whether Layer‑2 ecosystems can find ways to share more fee revenue with the base layer or whether the network’s staking and deflationary mechanisms alone can sustain investor confidence. The answer will shape ETH’s trajectory into 2026.