In recent weeks, Ethereum has emerged as a focal point in the cryptocurrency ecosystem, with a noticeable uptick in on-chain activity. This rise in engagement is attributed to a surge in institutional interest and increased activity across Ethereum’s decentralized exchanges (DEXs) and layer-2 networks.
Institutional Investment Surge
The latest report from CoinShares reveals a significant rebound in institutional investments in digital asset products. Last week alone, these products saw inflows of $176 million. Ethereum stood out with $155 million in inflows, marking the highest year-to-date intake since 2021. This influx of capital is largely attributed to the recent launch of US spot-based ETFs, which have drawn significant attention from institutional investors. James Butterfill, head of research at CoinShares, emphasized that this surge in inflow reflects a strong and positive sentiment toward Ethereum and highlights its increasing prominence in the crypto market. Investors reportedly capitalized on recent price corrections, viewing them as an opportunity rather than a setback. CoinShares notes that while total assets under management (AuM) had fallen to $75 billion, over $20 billion was wiped off, but have since recovered to $85 billion.
Layer-2 Network Activity
On August 12, Ethereum layer-2 networks recorded a cumulative 298 transactions per second (TPS), just shy of the previous all-time high of 322 TPS set on July 18. This high level of activity demonstrates the scalability and efficiency of Ethereum’s layer-2 technologies, which are crucial for supporting the network’s expanding user base. Base and Arbitrum, two prominent layer-2 solutions, reported 2.64 million and 1.37 million weekly active users, respectively. Uniswap, a leading DEX on the Ethereum network, has been particularly noteworthy. July saw a record-setting 8.65 million new addresses created on Ethereum’s layer-2 networks via Uniswap, nearly doubling the 4.93 million addresses added in June.
Ethereum's Established Role in DeFi
Ethereum’s total value locked (TVL) on its mainnet currently stands at $98 billion, indicating its continued dominance in the DeFi space. Meanwhile, the total value locked across all Ethereum layer-2 networks has reached $38 billion.
Ethereum continues to strengthen its position in the cryptocurrency ecosystem thanks to the surge in institutional investments and notable activity on layer-2 networks. This underscores the platform's significance for the future of decentralized finance and blockchain technology.
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