Ethereum continues to be at the forefront of decentralized applications in terms of volumes and deposits. Despite the lower transaction fees and increase in unique active addresses on rival blockchain networks like Solana and BNB Chain, Ethereum’s DApp volume growth remains unhindered by well-funded organizations. The recent surge in Ethereum network activity stands out from broader cryptocurrency market trends and even contradicts other usage metrics.
The recent surge in Ethereum network activity stands out from broader cryptocurrency market trends and even contradicts other usage metrics.
The recent surge in Ethereum network activity stands out from broader cryptocurrency market trends and even contradicts other usage metrics. The recent surge in Ethereum network activity stands out from broader cryptocurrency market trends and even contradicts other usage metrics. Despite the low transaction fee of $2.4, the figures in decentralized finance (DeFi) applications, where deposits can exceed $1 billion, may be skewed, making it impossible to confirm any manipulation.
Ethereum is the only network among the top 20 to report volume growth, with an impressive 83% increase compared to the previous week. Similar protocols like BNB Chain, Polygon, Solana, and TON saw an average volume drop of over 30%. Furthermore, Ethereum’s 475,980 addresses pale in comparison to BNB Chain’s 1.18 million and Solana’s 1.62 million addresses.
Surprisingly, the increase in Ethereum’s volume did not match an increase in user numbers. Using unique active addresses interacting with DApps as an indicator, Ethereum saw 8% fewer users compared to the previous week, a contradictory situation given the significant volume increase. Despite having fewer users due to relatively high fees, Ethereum’s growth in deposits might be compensating for the decline in activity.
The total value locked in Ethereum’s DeFi applications fell by 17.5% in seven days, while competitors like Solana and Avalanche managed to attract deposits. Additionally, the number of DApp transactions on the Ethereum network did not increase during this period of rising volumes, indicating that a more comprehensive analysis is needed to understand the anomaly.
Ethereum’s volume growth was primarily driven by a 422% increase in Balancer over seven days, reaching a total of $40.6 billion, which was 13 times more than the total activity on BNB Chain during the same period. However, Balancer’s significant volume increase did not align with improvements in other metrics; the DApp saw a 5% drop in unique addresses and a 14% drop in transactions within the same week.
Excluding Balancer’s contribution, Ethereum’s volume growth over seven days actually fell by 5% because this single DApp accounted for 59.5% of the entire network’s volume. The reported activity growth on Ethereum should be monitored carefully due to the distortion caused by a single DApp.
Disclaimer:
The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
