Ethereum’s layer-1 network recorded a new daily transaction high this week, even as transaction fees continued to trend sharply lower, underscoring improving network efficiency following recent protocol upgrades.The Ethereum mainnet processed 2.2 million transactions in a single day on Tuesday, marking a new all-time record, according to data from Etherscan. At the same time, average transaction costs fell to approximately $0.17, a level not seen since before the network’s peak congestion periods.Ethereum fees down sharply from 2022 peakTransaction fees on Ethereum have declined significantly from prior cycle highs. The most expensive period for Ethereum transactions occurred in May 2022, when average fees surged to more than $200 per transaction amid extreme network congestion and heightened speculative activity.Since then, fees have steadily compressed as the network underwent multiple upgrades aimed at improving throughput and efficiency. Fees have remained on a downward trend since Oct. 10, when average transaction costs briefly rose to around $8.48 during a major market-wide liquidation event.Despite lower fees, Ethereum’s network usage has continued to grow, suggesting that recent scalability improvements have allowed higher transaction volumes without triggering fee spikes.Layer-1 usage rebounds despite Layer-2 competitionHistorically, periods of elevated Ethereum fees pushed users toward cheaper alternatives, particularly layer-2 networks. However, the recent surge in mainnet transactions indicates renewed activity directly on Ethereum’s base layer.The combination of rising transaction counts and lower costs suggests that Ethereum is increasingly functioning as a high-capacity settlement layer, even as layer-2 ecosystems continue to expand.Developer activity has also accelerated. Data from Token Terminal shows that the number of new smart contracts created and deployed on Ethereum reached 8.7 million in the fourth quarter, marking a record for the network.Two major Ethereum upgrades in 2025Ethereum implemented two major protocol upgrades in 2025 that likely contributed to both the surge in transactions and the sustained decline in fees.The Pectra upgrade, activated in May, focused on validator enhancements, improved staking flexibility, and groundwork for future scalability features. The changes aimed to strengthen Ethereum’s validator set while improving long-term network resilience.The Fusaka upgrade further expanded Ethereum’s capacity by increasing the network’s gas limit from 45 million to 60 million. The upgrade was designed to boost scalability, improve data handling, and enhance overall network efficiency.In February, more than 50% of Ethereum validators signaled support for raising the gas limit, increasing the maximum amount of computation and transaction data that can be processed in a single block. The change allowed Ethereum to handle higher transaction volumes without driving fees higher.Efficiency gains reshape Ethereum’s cost dynamicsThe latest data highlights a structural shift in Ethereum’s performance profile. While transaction volumes continue to rise, fee pressure has remained muted — a sharp contrast to previous cycles when network usage and costs moved in lockstep.As developers increasingly rely on Ethereum as a settlement layer and validators support higher capacity limits, the network appears to be entering a phase where growth in activity is no longer constrained by prohibitively high transaction fees.