Daily transaction fees in the Bitcoin network have collapsed more than 80% since April, according to a report from Galaxy Digital. Until August 2025, almost 15% of the blocks were “free,” which means they are mined with minimal or no transaction fees, one Satoshi per virtual byte or less.
Lower bitcoin (Btc) Transaction fees benefit users but reduce the income of miners, which increases concerns about maintaining a long -term network security model.
The bitcoin incentive structure depends on miners paid for their work through block rewards and transaction fees. But in April 2024 stopping the cutting rewards at 3.125 BTC per block, miners lean greatly on the fee market, and it is drained.
“As the block rewards shrink, more weight has dropped into transaction fees,” Pierre Salaties, chief business official at the DFinity Foundation, said Cointelegraph. “If the use does not grow, the base thins, and the guarantees are weakened. Long -term throughput is important for the system to defend itself.”
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Bitcoin Onchain activity has fallen
Bitcoin’s onchain activity has slowed down significantly since the collapse of non -finances Trends such as ordinal and runes. Galaxy reports Notes Those were the OP_RETURN transactions, which were used over the time of 2024 ordinal booms, which are now only 20% of the day -to -day volume, down from over 60% in their climax.
Meanwhile, alternative layers 1s such as Solana get traction for cases of high -frequency use such as memecoins and NFTs. Moreover, the increasing area of Bitcoin ETF, which now holds more than 1.3 million BTCs, has pushed a more volume of BTC offchain, limiting the motion that would otherwise develop fees.
The Bitcoin fees market is resilient by design, which means the fees will rise when demands are required and the demand is demanded and the activity slows down. However, if the demand continues to retreat, miners may be left with little incentive to secure the network. Galaxy noted that almost 50% of recent blocks are not yet full, and mempool activity remains lazy.
Against this backdrop, a new hope is emerging in the form of BTCFI, Bitcoin-native defi. Unlike Defi in Ethereum or Solana, which uses Smart contracts with chainsBTCFI uses Bitcoin as a base asset while building financial applications such as lending, trade and generation of yield to layers or protocols that directly interact with the Bitcoin network.
“Every BTCFI action requires the transition of bitcoin,” Salaties explained. “The motion drives the calculation, the calculation consumes the block space, and the cost brings the cost.” In other words, if BTCFI grows, as well as onchain and pay revenue.
Related: Defi’s future is not in Ethereum – it’s in Bitcoin
From digital gold to financial primitive
Salaties mentioned that Bitcoin has long been viewed as “digital gold,” a value store more than an available owner. However, he sees it emerging with something more foundation: a financial primitive.
“A financial primitive is a building developers that can be used to design flows, tools, and logic,” he said. “In that paper, Bitcoin is becoming more than just a hold, it becomes a programmable component within the wider financial systems.”
Julian Mezger, Chief Marketing Officer of Liquidium, said the infrastructure improvements set the stage for change. “The last five years have changed the infrastructure of Bitcoin from a simple settlement layer in a multi-layered ecosystem,” he said. “We now see the foundations for the real bitcoin-native defi laid.”
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