Ethereum’s Big Upgrade Fizzles: User Activity Slumps Despite Hype

Ethereum’s latest upgrade promised fireworks—but the network’s user metrics are flashing warning signs instead. Here’s why the ’post-upgrade euphoria’ never arrived.

The paradox of progress: Even with faster transactions and lower fees, active addresses and daily transactions have dipped. Traders might be chasing the next shiny thing—or just waiting for Wall Street to ’discover’ crypto (again).

Ghost chain fears: Some whisper that L2 solutions are cannibalizing the mainnet, while others blame the usual summer crypto doldrums. Either way, the ’ultrasound money’ narrative hits a sour note when usage declines post-Merge.

Silver lining playbook: Dev activity remains strong, suggesting builders aren’t spooked. But with ETH prices lagging Bitcoin’s latest rally, the network’s ’fundamentals over hype’ mantra faces its toughest test yet.

Funny how a ’flippening’ always seems three upgrades away—just like institutional adoption.

The Pectra upgrade

Ethereum’s Pectra upgrade, launched earlier this month, combined the Prague and Electra proposals to enhance validator performance, gas efficiency, and account abstraction. 

While it introduced important technical improvements for developers and node operators, the broader user base has shown little interest.

Unlike the Dencun upgrade, Pectra did not trigger a spike in network activity, highlighting a growing gap between backend advancements and front-end adoption.

No network activity surge?

Despite Ethereum’s successful Pectra upgrade, network activity remains sluggish. Glassnode reports a 1.8% drop in new addresses and an 8.4% decline in resurrected addresses compared to year-to-date averages.

This suggests weak onboarding and limited user re-engagement.

Source: Glassnode

However, ETH ‘churned’ has also been down by 8.5%, suggesting existing users are sticking around longer.

While network activity appears stagnant, this shift toward stronger retention may be a sign of a healthier, more stable user base forming beneath the surface of Ethereum’s cooling engagement metrics.

ETH’s flash in the pan?

Ethereum Daily Active Addresses have seen sharp increases since early May, but the pattern remains erratic.

Source: Santiment

Santiment data shows that while engagement briefly surged, peaking above 555K addresses, activity has been volatile, with frequent dips and recoveries. At the same time, short-term holders also spiked, hinting at speculative behavior rather than long-term conviction.

This aligns with broader post-Pectra trends. The uptick may reflect short-term reactions rather than a durable shift in user behavior or network utility.