Ethereum L1 Shatters Transaction Records as 2026 Begins; Fees Plunge to $0.17

While the broader market fixates on price stagnation, Ethereum’s base layer quietly entered 2026 with a fundamental breakout. The network processed a historic 2.23 million transactions on Dec. 29, 2025, defying the narrative that Layer-1 (L1) activity is destined to migrate permanently to Layer-2s.

This isn’t a single-day anomaly. Data from Blockchair confirms a sustained surge, with the network settling 2.13 million transfers on New Year’s Eve and maintaining near-record volume through Jan. 2. The previous daily record, set on Jan. 14, 2024 (1.96 million), has been eclipsed four times in the last week alone.

The Efficiency Paradox: Record Load, Pennies in Fees

Historically, this level of congestion would have spiked gas fees to unusable levels. Instead, average transaction costs have collapsed to approximately $0.17. This efficiency is the direct result of the Fusaka and Pectra upgrades implemented in 2025, which increased the block gas limit to 60 million and optimized blob throughput for rollups.

The decoupling of volume and cost signals that Ethereum has successfully transitioned from a constrained execution layer to a high-throughput settlement engine.

Smart Contract Explosion

The activity is structural, not just speculative. Token Terminal data reveals a record 8.7 million smart contracts were deployed in Q4 2025, indicating that infrastructure development is outpacing price action. This surge suggests developers are leveraging the reduced fee environment to deploy complex applications that were previously cost-prohibitive on the mainnet.

The network just processed its highest volume in 10 years with no congestion and sub-dollar fees. The 'usability crisis' narrative is dead.

Despite the fundamental heat, ETH remains range-bound, trading at $3,110 (flat over 24h). The market has yet to price in the network’s newfound ability to scale L1 capacity without alienating users via gas spikes.