As the cryptocurrency market rebounded from the 2022 lows in the first quarter of 2023, a Messari report shows that Ethereum, the second largest cryptocurrency by market capitalization, leads in various financial and ecosystem metrics, consolidating its position in decentralized applications (dapps) and smart contracts.
Despite a modest decline in network usage of around 2.5%, the report notes that Ethereum remained resilient and dominated several key indicators. For example, its market capitalization posted an 83% quarter-on-quarter increase, outperforming its peers in the “tier 1” category.
Additionally, smart contract platform revenue, derived from the sum of all fees collected by the protocol, increased to $457 million in Q1 2023, nearly 2.8 times the combined revenue of all other smart contract networks. layer 1 of the competition.
Ethereum dominates with the highest TVL
Ethereum’s leadership also extended to other areas of the ecosystem.
The platform led decentralized finance (DeFi) when ranked by total value locked (TVL) and transaction volume. DeFiLlama data shows that Ethereum manages more than $24.9 billion, more than half of all DeFi TVL as of writing June 18.
In addition, Ethereum maintained its dominance in non-fungible tokens (NFTs), representing the highest volume among all prominent Layer 1 networks, Messari added.
The report also points out that inflationary and deflationary pressures are essential to assess the viability and sustainability of a network. Using this metric, ethereum (ETH) and binance coin (BNB) were the only tokens to exhibit deflationary trends, with their supply declining by 0.2% and 5.4%, respectively. This was mainly due to their mechanisms of burning a part of the transaction fees.
On Ethereum, the implementation of EIP-1559 saw the start of a portion of the “Base Fee” that is not paid to validators. In the Ethereum transaction fee model, the “base fee” is a fee that each user must pay when transferring tokens or implementing smart contracts.
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According to UltraSound Money, 3,398,675.70 ETH have since been spent. Burned and withdrawn from circulation.
The strength of the Ethereum network was also reflected in its validation ecosystem. With a security budget totaling $32.6 billion, Ethereum has a considerable stake among all Proof-of-Stake Layer 1 networks. Despite the stake weight limits, the sheer number of Ethereum validators, 618,797, pointed to the decentralization and security of the network.
As of June 18, on-chain data shows that 19,801,316 ETH have been bet, with the average bet per validator being 32.19 ETH.
