Ethereum (ETH) processed 1.87 million transactions on December 31, marking the network's highest single-day count in its 10-year history.

The milestone surpasses the previous all-time high from 2021 during the NFT and DeFi boom.

Average transaction fees dropped to $0.17, down from $2.15 six months earlier, according to Etherscan data.

The network also saw 8.7 million smart contract deployments in Q4 2025, the highest quarterly total on record.

What Happened

Two major network upgrades drove the transaction surge.

The Pectra upgrade activated May 7, 2025, doubling blob capacity from three to six per block.

This reduced Layer 2 settlement costs and improved validator efficiency.

The Fusaka upgrade launched December 3, 2025, introducing PeerDAS (Peer Data Availability Sampling).

This increased the gas limit by 33% from 45 million to 60 million units per block.

Together, these upgrades expanded Ethereum's capacity without congesting the network or spiking fees.

Why It Matters

The record transaction count shows Ethereum scaling effectively while maintaining decentralization.

Nick Ruck, director at LVRG Research, told The Block that network upgrades "slashed fees, boosted scalability, and attracted institutional participation via ETFs and real-world asset tokenization."

Justin d'Anethan, head of research at Arctic Digital, noted that "the majority of stablecoins activity, RWAs, yield and staking protocols, even trading, gaming and NFT activity is still very much Ethereum or EVM compatible."

Two more major upgrades are planned for 2026.

Glamsterdam, expected in early-to-mid 2026, will focus on performance improvements.

Hegota, slated for the second half of the year, aims to enhance long-term sustainability.

ETH was trading at $3,050 as of Friday afternoon, up 2.2% in 24 hours.