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Earthquakes vary in size over many orders of magnitude, often rupturing in complex multifault and multievent sequences. Despite the large number of observed earthquakes, the scaling of the earthquake energy budget remains enigmatic. We propose that fundamentally different fracture processes govern small and large earthquakes. We combined seismological observations with physics-based earthquake models, finding that both dynamic weakening and restrengthening effects are non-negligible in the energy budget of small earthquakes. We established a linear scaling relationship between fracture energy and fault size and a break in scaling with slip. We applied this scaling using supercomputing and unveiled large dynamic rupture earthquake cascades involving >700 multiscale fractures within a fault damage zone. We provide a simple explanation for seismicity across all scales with implications for comprehending earthquake genesis and multifault rupture cascades.