Ethereum continues to lead in the adoption of decentralized applications (DApps), both in terms of transaction volume and deposits. Although competing chains like Solana and BNB Chain benefit from lower transaction fees, improving metrics such as unique active addresses, nothing seems to stop well-funded entities from increasing the number of Ethereum DApps.
In fact, the recent surge in activity on the Ethereum network contrasts sharply with broader cryptocurrency market trends and even contradicts other usage metrics. While no manipulation can be confirmed, it should be noted that despite transaction fees reaching $2.4, figures might be distorted, especially in decentralized finance (DeFi) applications, where deposits can exceed $1 billion.
Notably, Ethereum is the only network among the top 20 to report an 83% increase in transaction volume compared to the previous week. In contrast, similar protocols like BNB Chain, Polygon, Solana, and TON saw average transaction volumes decrease by over 30%. Moreover, Ethereum’s 475,980 addresses pale in comparison to BNB Chain’s 1.18 million and Solana’s 1.62 million.
Interestingly, the surge in Ethereum’s transaction volume has not led to an increase in user numbers. Using unique active addresses interacting with DApps as an indicator, Ethereum’s user count fell by 8% from the previous week. While this is better than its competitors, it seems paradoxical given the substantial increase in transaction volume.
One might argue that although the relatively high fees have led to a decrease in user numbers, the growth in Ethereum deposits might have offset the decline in activity.
Data shows that the total value locked in DeFi applications on Ethereum fell by 17.5% over seven days, while competitors like Solana and Avalanche successfully attracted deposits. Additionally, during the period of transaction volume surge, the number of DApp transactions on the Ethereum network did not increase, indicating that a more thorough analysis is needed to understand the anomaly.
The growth in Ethereum’s transaction volume is mainly due to Balancer, which grew by 422% over seven days, totaling $40.6 billion. For instance, this is 13 times the total activity of BNB Chain during the same period. However, the significant increase in Balancer’s transaction volume does not align with improvements in other metrics; in the same week, the unique addresses of the DApp decreased by 5%, and transaction volume decreased by 14%.
Excluding Balancer’s contribution, Ethereum’s seven-day transaction volume growth actually declined by 5%, as this single DApp accounted for 59.5% of the entire network’s transaction volume. While it is not uncommon for one DApp to dominate the transaction volume of a blockchain—BNB Chain is mainly driven by PancakeSwap, and Uniswap accounts for nearly 50% of the volume on the Polygon network—Ethereum’s reported activity growth should be viewed cautiously due to the distortion caused by the data from one DApp.
