Daily transaction charges on the Bitcoin community have collapsed by greater than 80% since April, in keeping with a report from Galaxy Digital. As of August 2025, practically 15% of blocks are “free,” which means they’re being mined with minimal or no transaction charges, only one satoshi per digital byte or much less.
Lower Bitcoin (BTC) transaction charges profit customers however cut back miners’ income, elevating considerations concerning the sustainability of the community’s long-term safety mannequin.
Bitcoin’s incentive construction depends on miners being compensated for his or her work via block rewards and transaction charges. But with the April 2024 halving slicing rewards to three.125 BTC per block, miners are leaning closely on the charge market, and it’s drying up.
“As block rewards shrink, extra weight falls on transaction charges,” Pierre Samaties, chief enterprise officer on the Dfinity Foundation, advised Cointelegraph. “If utilization doesn’t develop, that base thins, and the ensures weaken. Sustained throughput is crucial for the system to defend itself.”
Related: Bitcoin 2025 builders predict DeFi will unseat conventional finance
Bitcoin onchain exercise slumps
Bitcoin’s onchain exercise has slowed considerably because the decline of non-monetary traits like Ordinals and Runes. Galaxy’s report notes that OP_RETURN transactions, used closely throughout the 2024 Ordinals growth, now account for simply 20% of each day quantity, down from over 60% at their peak.
Meanwhile, various layer 1s like Solana are gaining traction for high-frequency use circumstances like memecoins and NFTs. Furthermore, the rise of spot Bitcoin ETFs, which now maintain over 1.3 million BTC, has pushed extra BTC quantity offchain, limiting motion that will in any other case generate charges.
Bitcoin’s charge market is elastic by design, which means that charges rise when demand surges and fall when exercise slows. However, if demand continues to shrink, miners could also be left with too little incentive to safe the community. Galaxy famous that just about 50% of current blocks haven’t been full, and mempool exercise stays sluggish.
Against this backdrop, a brand new hope is rising within the type of BTCfi, Bitcoin-native DeFi. Unlike DeFi on Ethereum or Solana, which makes use of sensible contracts on these chains, BTCfi makes use of Bitcoin as the bottom asset whereas constructing monetary functions like lending, buying and selling and yield era on layers or protocols that work together immediately with the Bitcoin community.
“Every BTCfi motion requires shifting Bitcoin,” Samaties defined. “Movement drives computation, computation consumes block house, and house carries price.” In different phrases, if BTCfi grows, so does onchain exercise and charge income.
Related: The way forward for DeFi isn’t on Ethereum — it’s on Bitcoin
From digital gold to monetary primitive
Samaties famous that Bitcoin has lengthy been considered as “digital gold,” a retailer of worth greater than a usable asset. However, he sees it evolving into one thing extra foundational: a monetary primitive.
“A monetary primitive is a constructing block builders can use to design flows, instruments, and logic,” he stated. “In that position, Bitcoin turns into greater than an asset to carry, it turns into a programmable element inside broader monetary methods.”
Julian Mezger, chief advertising officer of Liquidium, additionally stated that infrastructure enhancements are setting the stage for change. “The final 5 years have reworked Bitcoin’s infrastructure from a easy settlement layer right into a multi-layered ecosystem,” he stated. “We’re now seeing the foundations for true Bitcoin-native DeFi being laid.”
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