Ethereum, Solana, and Avalanche recorded stronger on-chain activity and lower transaction costs during the past year, even as their native tokens lost approximately half or more of their value. A new Bitwise staking report linked the improvement to larger blockspace, cheaper transactions, and rising institutional participation. However, token prices remained far below their 2025 levels.

The gap shows that blockchain performance and market sentiment no longer move together as closely as they did during earlier cryptocurrency cycles.

More Activity at Lower Cost

Bitwise found that activity expanded while user fees declined across the three proof-of-stake networks. The report attributed that shift mainly to protocol upgrades rather than weaker demand. Ethereum, Solana and Avalanche increased network capacity to process more transactions at lower cost. As a result, users gained cheaper access while developers received more room to build applications.

Previous market cycles often treated congestion and expensive transactions as signs of strong demand. Now, greater capacity allows networks to handle heavier use without creating the same fee pressure. Lower costs also reduced protocol revenue because the networks earn much of their direct income from transaction fees. Developers accepted that trade-off to improve scalability and encourage wider adoption.

Can rising network use support long-term value when fees, staking yields and token prices continue to fall?

Institutional Staking, Declining Yields 

Proof-of-stake networks depend on validators who lock digital assets to secure transactions and receive staking rewards. Institutional investors drove much of the additional Ethereum entering validator pools during the second quarter. Exchange-traded products, corporate treasuries, and other large holders increased their staking exposure.

More than 40 million ETH, equal to roughly one-third of Ethereum’s circulating supply, had entered staking by the end of the period. BitMine, the largest public Ethereum treasury company, reported staking nearly 4.9 million ETH from total holdings of about 5.8 million ETH.

However, staking yields continued to decline because rewards now reach a larger group of validators. More participants therefore share the available token issuance and transaction-fee income. Bitwise estimated that about 93% of Ethereum staking rewards and more than 90% of Solana rewards came from newly issued tokens.

That structure increases token supply and dilutes holders who do not stake. Meanwhile, lower fee revenue raises further questions about long-term staking economics.

Liquid staking products also continued attracting attention because they let holders earn rewards while retaining usable tokenized assets. Investors can deploy those assets as collateral, supply them to lending markets, or place them in liquidity pools. Institutions can therefore combine staking income with broader capital use.

Also Read: Ethereum Price Falls as ETH Faces Liquidations and Tests Crucial Support Levels

Token Market Performance

Developers continued launching applications, institutions added staked assets, and users remained active across decentralized finance platforms despite weaker token valuations. The trend suggests that practical blockchain use now plays a larger role in network activity. Meanwhile, token prices remain tied to market sentiment and wider economic conditions.

For developers, lower fees and greater capacity support broader adoption. For investors, falling yields, inflation-funded rewards, and weaker fee income create different measures for assessing returns.

Ethereum, Solana, and Avalanche processed more activity at lower costs despite sharp token-price declines. Institutional staking also expanded, although yields and protocol revenue fell. The data show that investors must evaluate network usage, token issuance, fee income and staking returns separately from short-term market performance.