Recently, many analysis articles in the crypto space have been discussing Ethereum's performance in Q4 of last year, with the number of smart contract deployments reaching a record high and transaction counts breaking records. Looking at these data, it's easy to be fooled into thinking Ethereum is about to take off. Many industry influencers are also calling for a bull market in 2026, but I still want to carefully analyze from the on-chain data perspective—what exactly is the current situation of Ethereum?

After examining the data closely, it is indeed interesting. From the two indicators of smart contract deployment scale and transaction volume, the Ethereum ecosystem is quite active, thriving in prosperity. But there is a detail that is easily overlooked—why, despite such high user activity, are Gas fees still low?

Looking at Ethereum's Gas costs and ETH burning data makes this clear. Although there has been some rebound, the increase is not significant, far from reaching a fever pitch. The number of newly added validator contracts daily is also at a cycle low, consistent with the actual market performance. This is a bit awkward—activity and fee performance are disconnected. What does this imply?

The real issue lies in the structural changes of the Ethereum network. After a series of upgrades—Pectra, Duncun, and this year's Fusaka—Ethereum has made significant optimizations in Gas consumption and data processing capabilities. Block capacity has been increased, allowing the network to remain smooth even during congestion. The most direct result is that Gas prices have remained low for years.

Currently, many of the seemingly lively transactions on Layer 1 are actually simple operations with low Gas—such as stablecoin settlements and batch contract deployments. Most large transactions and high-frequency complex operations have already been diverted to Layer 2 solutions. Layer 1 now mainly handles settlement and data publishing, essentially becoming a settlement layer.

From this perspective, Ethereum has formed a new pattern of "high activity, low fees." It sounds elegant, and the competitiveness of public chains has indeed improved. But frankly, this activity is more a sign of a healthy ecosystem rather than enough to drive a real bull market.

So, the current Ethereum is like a double-edged sword—on the surface, data looks hot, but the fee market remains cold. The true ignition point might still be ahead—waiting for the demand for high-frequency, complex transactions to truly explode. Right now, the ecosystem is still accumulating strength.