Ethereum Resilience Being Tested as DApp Activity Goes Down
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, heads into a trying period with its decentralized application activities going down notably.
New figures have it that activity related to Ethereum DApps has sunk by 17%. The layer-2 ecosystem that was expected to drive scalability and reduce the transaction cost of Ethereum bore the brunt of this fall.
Despite these setbacks, Ethereum remains the market leader in terms of activity and development. But competition is edging closer-in the same period, Solana saw a 24% increase in DApp volumes, while BNB Chain saw a 23% increase.
The current average transaction cost on Ethereum stands at $1.70, down from its previous highs but still not as low as other layer-1s. Scalability solutions have helped partially, but at the cost of extra complexity for users and added questions about the long-term sustainability of the network's security.
The 3.3% staking yield for Ethereum is lagging against traditional instruments like bonds, with the 6-month US Treasury bill offering 4.6%. Currently, only 28.5% of ETH in circulation are at stake, significantly below the level of its competitors like Solana, which has 65.8%.
ETH is currently trading at $2,390, gaining 2.9% after the FOMC meeting saw the Fed cut rates by 50 basis points. However, the ETH/BTC ratio recently hit a new low, suggesting that Ethereum is still underperforming Bitcoin.
