18 essays on fiscal policy, monetary theory, and governance in the world’s largest programmable economy
In April 2024, when most of the industry was celebrating Ethereum’s successful transition to Proof of Stake and the arrival of spot ETFs, I began asking an uncomfortable question: where is the revenue?
At the time, it was a contrarian position. ETH was trading near its yearly high. The Dencun upgrade had just launched, promising cheaper transactions and a new era of scalability. The narrative was clear: Ethereum had won the platform war.
But the data told a different story. Dencun activated on March 13, 2024 — the exact day of ETH’s yearly price peak. It wasn’t a coincidence. By making Layer 2 transactions nearly free, Ethereum had effectively eliminated its own tax base. The revenue that funded network security, powered EIP-1559 burns, and gave stakers real yield began to evaporate.
Eighteen months later, Ethereum’s daily fee revenue has fallen from $27 million to $500,000 — a 98% collapse. The protocol generates less than 4% of the value created on its own platform. Applications built on Ethereum earn $8.2 million per day; the base layer captures $318,000. It is as if a country with a multi-trillion dollar GDP collected less tax revenue than a mid-sized city.
Everything written in these essays anticipated this trajectory. Not because of any special foresight, but because the economic framework was right: Ethereum is not a technology company, and it is not a commodity. It is a digital economy — with taxation, monetary policy, fiscal trade-offs, and governance sovereignty.
📝 Section I — Accounting & Monetary Identity
How should we account for Ethereum’s economics? The answer changes everything.
Are Staking Rewards an Expense for Ethereum?
April 2024 · ⭐️ 9/10
The essay that started it all. Staking rewards function as dividends — a redistribution of value to shareholders (stakers), not an operating cost. This single reclassification transforms Ethereum from a billion-dollar annual loss into a profitable economic engine.
Ethereum Issuance
August 2024 · ⭐️ 7/10
Issuance reduction is a regressive policy. Large institutional stakers absorb cuts through economies of scale. Solo stakers — the backbone of decentralization — get squeezed out.
Ethereum’s Monetary Paradox: A Currency That Thinks It’s a Commodity
November 2025 · ⭐️ 9/10
ETH suffers from a fundamental category error. Commodity pricing and currency pricing lead to entirely different valuations. A nation that doesn’t know whether it’s selling oil or issuing currency cannot design coherent economic policy.
📝 Section II — The Revenue Crisis
Ethereum’s fee revenue has collapsed 98%. These essays traced the structural causes — before the market noticed.
Are Fees Really Important for L1s?
August 2024 · ⭐️ 8/10
Fees are the only organic demand driver for ETH. They power the EIP-1559 burn mechanism, fund real staking yields, and create genuine buy pressure. Without fee revenue, ETH has no economic engine.
Deterioration of Ethereum Demand
August 2024 · ⭐️ 9/10
The most prescient essay. Dencun activated on March 13, 2024 — the exact day of ETH’s yearly price peak. This was not coincidence; it was causation.
Are Gas Prices in Ethereum Predictable?
September 2024 · ⭐️ 7/10
A small oligopoly of L2 sequencers now controls the majority of transaction flow, paying near-zero fees to the base layer.
Ethereum Must Defend Its Premium: The Laffer Curve Perspective
April 2025 · ⭐️ 9/10
The Laffer Curve applied to blockchain economics for the first time. After Dencun, Ethereum swung to the extreme left: fees near zero, maximum activity, minimum revenue.
📝 Section III — Governance & The Ethereum Foundation
Ethereum has the sovereignty to fix its economics. These essays ask whether it has the will.
Reclaiming Ethereum’s Value
April 2025 · ⭐️ 8/10
Three fiscal reforms: blob fee floor, ETH as a Digital Bond guaranteeing 4% staking yield, and retroactive grant commissions. The blob fee floor concept anticipated EIP-7918.
Ethereum Digital Economy
May 2025 · ⭐️ 9/10
The manifesto. Gas fees are taxes. Staking rewards are dividends. L2s are allied nations using a shared currency. Blockspace is sovereign territory. This is not metaphor; it is the correct analytical framework.
The Paradox of Subtraction
October 2025 · ⭐️ 8/10
«Silence is not neutrality. Silence is policy.» The Foundation’s refusal to engage with economic incentives does not make Ethereum more pure — it makes it poorer.
Ethereum Is Not Linux
February 2026 · ⭐️ 9/10
Linux succeeded — and captured zero economic value. If Ethereum follows the same path, ETH the token becomes a utility with no economic rights. The applications will thrive. The protocol will starve.
📝 Section IV — Valuation Framework
Traditional models fail for Ethereum. These essays build new ones.
Understanding Ethereum’s Token Demand: A Micro Approach
November 2025 · ⭐️ 8/10
Four types of demand: Organic (~$218M/yr), Monetary (~$23.8B stock), Productive (~$1.26B/yr), DeFi (~$50B TVL). Organic demand has collapsed 98%. But monetary demand is at all-time highs.
Are Layer 1s Overvalued — or Are We Valuing the Wrong Thing?
December 2025 · ⭐️ 9/10
At 1,029x P/Revenue, Ethereum is either the most overvalued asset in financial history — or the market is applying the wrong framework entirely. As jurisdictions, the numbers begin to make sense.
Ethereum as an Open Source Digital State
January 2026 · ⭐️ 10/10
The masterpiece. A formal model of Ethereum as a digital state with five public services, seven constitutional principles, and a complete fiscal framework. The intellectual architecture for resolving the revenue crisis.
📝 Section V — Technical Analysis
Economic sovereignty requires concrete mechanisms.
EIP-7918: Restoring Economic Balance to the Blob Market
November 2025 · ⭐️ 9/10
A constitutional moment — the point at which Ethereum decides whether L2s are free riders or contributing members of the economy.
Fusaka & EIP-7935: Raising the Gas Limit to 60M
November 2025 · ⭐️ 8/10
Build more floors in Manhattan instead of sending everyone to the suburbs.
Fusaka & PeerDAS: Scaling Ahead of Demand
November 2025 · ⭐️ 8/10
«Scaling without value capture turns ETH from a productive economic asset into a pure utility.»
The Central Thesis
Ethereum is not overvalued at 1,029x P/Revenue. It is strategically unresolved.
The protocol hosts $159 billion in stablecoins at an effective tax rate of 0.14%. Applications built on Ethereum generate $8.2 million per day; the base layer captures 3.9% of that value.
These are not the numbers of a failed economy. They are the numbers of an economy that has not yet implemented coherent fiscal policy.
The revenue crisis is real. But so is the sovereignty.
Jesús Pérez Sánchez
Crypto Plaza Research
February 2026
Originally published on Paragraph
