In this issue of Coin Metrics’ State of the Network, we break down the forces behind Ethereum’s renewed momentum and the role of scaling in supporting future growth. Are DATs and stablecoin legislation enough to justify Ethereum’s current momentum? Is Ethereum prepared to onboard new users and support higher transaction volumes? In this update, we unpack the impact of DATs on token supply and sustainability, how an influx in mainnet activity affects the user-experience, and continued scaling of Layer-2s (L2s) for Ethereum.
Key Takeaways
- Hungry Digital Asset Treasuries
DATs are rapidly accumulating ETH and exploring staking and DeFi activities to earn additional rewards. DATs benefit from maintaining a higher multiple-of-net-asset-value (mNAV), a measurement of ETH held to shares outstanding, which enables them to raise funds to continue buying ETH. - Sustainability of Ethereum’s Stablecoin Dominance
Ethereum supports the largest share of stablecoin supply, but network constraints like slower block times and higher fees hinder growth potential. While transaction activity has risen, Ethereum will need to continue improving network capabilities to prevent other networks from siphoning stablecoin adoption. - Layer-2s Expanding Through Blobs
Layer-2s are increasingly posting blob data to Ethereum, which allows them to handle higher transaction volumes without significantly raising fees. Since the Pectra upgrade raised the blob inclusion target, Ethereum blocks are consistently carrying more blobs, expanding throughput and lowering costs across the L2 ecosystem.
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