3 Important Factors for Increasing Ethereum Dominance

  • Ethereum has been dominant since its inception as a smart contract and decentralized application (Dapp) platform.
  • Ethereum’s market dominance has increased from an average of 18% in July 2021 to the current 20%.
  • Ethereum is the absolute leader with a TVL of $24.6 billion, followed by Tron with $5.4 billion and BNB Chain with $3.3 billion TVL.

Ethereum continues to be the dominant cryptocurrency after Bitcoin and maintains its DeFi leadership; how did Ethereum become so strong?

Ethereum’s Market Share is Strengthening

Ethereum has been dominant since its inception as a smart contract and decentralized application (Dapp) platform. This analysis on Ethereum’s price and market value provides undeniable evidence that the blockchain has increased its market share over time.

As shown above, Ethereum’s market dominance has increased from an average of 18% in July 2021 to the current 20%. When we exclude Bitcoin from the analysis, Ethereum’s market share is currently 40.6%. This is a significant difference compared to Dapp-focused networks. Similarly, when we analyze the total value locked (TVL) in smart contracts for each network, this difference is also evident. Ethereum is the absolute leader with a TVL of $24.6 billion, followed by Tron with $5.4 billion and BNB Chain with $3.3 billion TVL.

The above graph shows that Ethereum’s TVL market share on the network decreased from 70.5% in June 2021 to 49.5% in May 2022. This movement occurred while Terra and Avalanche gained a total market share of 20% in smart contract investments. However, with the collapse of the Terra-Luna ecosystem in May 2022 resulting in developers halting the network, Ethereum quickly gained a 58% market share.

Despite the emergence of Dapps on BNB and Tron blockchains, Ethereum’s leadership has remained unquestioned over the past 12 months. This data indicates the insignificance of the total number of unique active wallets interacting with smart contracts (UAW) per chain.

For example, according to DappRadar, WAX has 363,600 active users and BNB Chain has 517,300 30-day UAW. These numbers are much higher than Ethereum’s 66,300 unique active addresses but reflect lower transaction fees and provide room for manipulation.

The Increase in Decentralization Strengthens Ethereum

Ethereum has the largest number of active developers with over 1,870. This is more than Polkadot (752), Cosmos (511), and Solana (383).

Currently, there are over 700,000 validators on the Ethereum network, and 99% of balances are locked in staking. The fact that each validator exceeds the 32 ETH limit undoubtedly inflates this number, but the largest known staking pool, Lido, controls 32% of the staking, followed by Coinbase with 9.6%.

Therefore, it is safe to say that Ethereum is much less centralized in terms of development and validation compared to Tron, BNB Chain, and Solana.

Other reasons for the increase in Ethereum’s dominance are derivative transactions and its dominance in the NFT market.

Derivative Markets are Important for Institutional Investors

Ethereum’s futures contracts are important for institutional trading applications such as futures contracts, hedging, and leveraged trading. ETH’s cash-settled futures were added to the Chicago Mercantile Exchange in February 2021. So far, no cryptocurrency other than Bitcoin has been able to reach the world’s largest derivatives exchange.

In the futures market, long and short positions are always balanced, but more active contracts – open positions – allow institutional investors to participate and require a minimum market size. Ethereum futures have a combined open position of $5.4 billion, while BNB only holds $380 million and Solana only holds $178 million.

Ethereum Still Leads in NFTs

Nonfungible tokens (NFTs) are a perfect example that cheaper and faster transactions do not always translate into increased adoption. There are no barriers for NFT projects to switch between blockchains for new listings or existing collections.

Ethereum, which has encountered transaction fees of up to $10, is the definite leader in terms of the number of buyers and total sales. According to the data

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

Unlock AI Capabilities with Pinokio: Effortlessly Run Any AI App in Minutes

The cryptocurrency market continues to evolve rapidly,...

Ethereum (ETH) ETF Approval Paves Way for Surge in Crypto Investment Funds: TD Cowen Analysis

<ul> <li>The recent approval of Ethereum exchange-traded funds...

Bitcoin (BTC) Laundering Saga: London’s Economic Crime Team Sentences Woman in £1.7M Case

The London Economic Crime Team has successfully...

Ethereum (ETH) Demand Skyrockets Amid Imminent ETF Approvals

<ul> <li>Ethereum’s daily net inflow to...
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Ethereum (ETH) ETF Approval Paves Way for Surge in Crypto Investment Funds: TD Cowen Analysis

<ul> <li>The recent approval of Ethereum exchange-traded funds...

How Elections Impact Bitcoin (BTC) and Ethereum (ETH) Prices: A Comprehensive Analysis

<ul> <li>Crypto investors have recently endured challenging market...
Merritt Vale
Merritt Valehttps://en.coinotag.com/
Merritt Vale is a 24-year-old woman who has a strong affinity for the Dogecoin community and has a particular love for the altcoin Shiba. With a passion for understanding the latest trends and developments in the cryptocurrency industry, Merritt provides fresh perspectives and valuable insights to her readers.
spot_imgspot_imgspot_imgspot_img

IT Pro Transforms Career with BlockDAG’s Cutting-Edge Mining Tech, Boosting Earnings in Crypto Mining ($BDAG)

<ul> <li>An IT professional transitions from a modest Litecoin mining setup to a thriving crypto enterprise.</li> <li>BlockDAG’s advanced mining technology offers similar...

Unlock AI Capabilities with Pinokio: Effortlessly Run Any AI App in Minutes

The cryptocurrency market continues to evolve rapidly, with new developments emerging daily. Recent trends indicate a growing interest in decentralized finance...

Ethereum (ETH) ETF Approval Paves Way for Surge in Crypto Investment Funds: TD Cowen Analysis

<ul> <li>The recent approval of Ethereum exchange-traded funds (ETFs) has opened the doors for more crypto investment products.</li> <li>While the speed of...