Ethereum's biggest bet in 2025: $100 million subsidy for the ecosystem, but the price has dropped 10%

In 2025, Ethereum made a seemingly “loss-making” move—actively lowering transaction fees and subsidizing the ecosystem expansion with over $100 million in potential revenue. Ironically, this year ETH price fell by 10%, dropping below $3,000, completely decoupled from the network’s strong activity levels. Behind this contradictory phenomenon reflects a significant gap between Ethereum’s long-term strategy and short-term market performance.

Strategic Choice: Using Revenue to Exchange for Ecosystem

Ethereum’s deliberate reduction of transaction fees has a clear purpose—to promote Layer 2 network growth and expand the entire ecosystem. The cost of this choice is tangible:

According to the latest reports, total L2 revenue in 2025 decreased by 53% to $129 million, while fees paid to the mainnet sharply dropped to only $10 million. This means L2 operators retained about $119 million in profit, while the Ethereum mainnet’s potential revenue decreased by approximately $103 million compared to 2024.

Numbers speak more intuitively:

This is not a forced move but a proactive strategic choice. Ethereum is exchanging real money for ecosystem prosperity.

Ecosystem Is Indeed Strengthening

The question is, what has this investment brought?

According to relevant data, Ethereum’s performance in 2025 has been quite strong:

Network activity hits new highs

In Q4, the number of smart contracts deployed on Ethereum reached 8.7 million, a record high. This is often seen as a leading indicator of future network activity, signaling user growth, transaction fee potential, and application ecosystem development.

Ecosystem dominance remains solid

Mainnet TVL accounts for 64%, making Ethereum still the absolute center of the DeFi market. Meanwhile, over half of the more than $307 billion in stablecoins are circulating on Ethereum, which is also the dominant network for real-world asset tokenization (RWA).

Institutional allocations continue to increase

ETH ETF managed assets have reached $28 billion, growing much faster than BTC. More importantly, the emergence of staking ETFs provides institutions with a “3-4% annualized yield + price appreciation” dual return model, which aligns with traditional financial institutions’ familiar allocation logic.

The “Decoupling” Mystery of Price and Activity

This is the most interesting part—the network activity hits new highs, yet ETH price fell 10% throughout the year to below $3,000.

What does this decoupling indicate?

Impact of short-term market sentiment

Market pricing power in the short term is often influenced by macro factors, sentiment fluctuations, and capital flows. Although ETH ETFs attracted substantial funds in 2025, they also experienced phased outflows. These changes in capital can obscure the true signals of fundamentals.

Market’s lag in recognizing infrastructure value

Ethereum is evolving from a mere crypto asset into institutional-grade financial infrastructure. This transformation is not instantaneous; it takes time for the market to fully understand and price it. Currently, the market is still digesting this shift.

Personal opinion: this might be an opportunity

From a fundamental perspective, Ethereum is doing the right thing—exchanging short-term revenue for long-term ecosystem prosperity. When the market finally realizes this, the price lag will be corrected. But this requires patience and more application deployment to validate the success of this strategy.

Outlook: Realization of Infrastructure Value

In 2026, several key variables for Ethereum are worth watching:

• Glamsterdam upgrade: plans to increase the single-block Gas limit from 60M to 200M, targeting 10,000 TPS, which will significantly enhance the mainnet’s capacity
• Acceleration of RWA tokenization: already underway, attracting more traditional assets to be onboarded
• Deepening institutional allocations: staking ETFs, stablecoin applications, enterprise-level settlement are all progressing

All these point in the same direction: Ethereum is becoming a true financial infrastructure, not just a crypto asset.

Summary

Ethereum’s 2025 strategy is clear—sacrificing over $100 million in revenue to foster ecosystem prosperity. From activity levels, contract deployments, and institutional interest, this investment is paying off. The price lag is temporary; ultimately, the market will pay for the value of infrastructure. The key is patience—waiting for this value to be fully recognized and priced in. This is not a quick story, but it may be the right one.