Ethereum has witnessed much healthier on-chain activity recently, with improved interest in non-fungible-tokens (NFTs) led by the launch of a mini-game by Yuga Labs, Bernstein said in a research report Monday.

Daily fees on the blockchain have more than doubled since the start of the year from around $2 million to $4 million-$6 million, the report said. Ether (ETH) has gained around 35%.

Bernstein notes that ether inflation has remained negative for over two weeks, with the expectation of further deflation with more on-chain activity and demand.

The next big catalyst for Ethereum remains the Shanghai upgrade due mid-March, when withdrawals of staked ether will be enabled, the note said.

(By Will Canny)