Decentralized application (DApp) activity on Ethereum (ETH) has fallen by 17% in the last two weeks, weighing on its value-added narrative, especially for the Layer 2 ecosystem. However, despite the decline in DApp transaction volume, other network metrics such as the number of active addresses and total locked value (TVL) have remained relatively stable. Ethereum's DApp active addresses are around 425,000 and TVL is around 18.9 million ETH, indicating that while transaction volume has declined, investors have not left the Ethereum network en masse.
From a market competition perspective, other blockchains such as Solana and BNB Chain have seen DApp transaction volumes increase by 24% and 23% in the same period, meaning that Ethereum's decline does not reflect a slowdown in the crypto market as a whole. The staking rates of networks such as Solana, Avalanche, and Cardano are significantly higher than Ethereum, indicating that staking yields are no longer the main driver of capital inflows into Ethereum. Ethereum's staking yield is 3.3%, which is lower than the return on U.S. Treasuries, reducing investors' motivation to participate in validation.
In addition, trading volume on major decentralized exchanges (DEXs) on Ethereum, such as Uniswap, has fallen by 18% in the past seven days. At the same time, the transactions per second of Ethereum's layer 2 solutions have also declined. However, Ethereum's overall on-chain activity and TVL remain solid, indicating its resilience in the face of competition.
Nevertheless, Glassnode data shows that the amount of ether deposits on exchanges has increased, which may mean an increase in short-term selling pressure. However, considering the user stability and locked value of the ETH network, the risk of ether prices falling below the $2,250 support level is not high at present, and investors should continue to pay attention to further developments in network activity.
