Source: Blue Planet Studio – Shutterstock
- A report by Messari has revealed that in Q1, the total value locked in Ethereum reached $48 billion, marking a more than 200% rise in its DeFi sector.
- Despite the record growth, the network has witnessed heavy competition with its market dominance in the DeFi market taking a major hit from the likes of Polkadot and Binance Smart Chain.
Top research and data analysis firm Messari has revealed that Ethereum marked an unprecedented growth in its DeFi sector. The network closed Q1 of this year with $48 billion in locked value. Compared to Q3 of 2020, this marked a 200% increase. Furthermore, compared to the first quarter of 2020, it is a gigantic 1,400% increase.
But while demand for DeFi has increased across the market, and especially in the Ethereum network, it is now clear that its competitors are gaining traction. Messari has shown that Ethereum’s dominance has dropped to 51% from a high of nearly 80% at the start of the year. Some of the most high-profile networks that have become mainstream and major challengers for Ethereum are Polkadot and Binance Smart Chain.
As we reported on Binance Smart Chain (BSC), the network has undergone unprecedented growth in the first few months of the year. With it, BNB has reached a new all-time high after gaining more than 700%.
Ethereum is keen on rolling out Ethereum 2.0 which will solve scaling and high gas fees. As the event approaches, the total value locked here has been increasing significantly. At the start of the month, this was close to $9 billion.
Ethereum’s transactions double
Ethereum’s slip in dominance has followed its inability to scale and reduce high gas fees amidst rocketing ETH prices. Just a few hours ago Glassnode, another crypto research firm, revealed that Ethereum on-chain transaction fees hit the second-highest level in history. At $47.3M in 24 hours, this is only second to $49.8M set on 23-Feb.
Ethereum has not only dominated in its token price and DeFi sector but according to the extensive data from Messari, also in transactions processed. Ethereum’s quarterly transactions were roughly worth $1.5 trillion. This more than doubles what it achieved in Q3 of 2020 and in fact more than the last 7 quarters combined.
According to Ryan Watkins, a top researcher with Messari, this shows consistent growth and usage in the network. The researcher further noted that price movement in the short term is superfluous as long as there was growth and development.
Ethereum is set for a record year. Its fundamentals are strong and institutional demand for its native token ETH has in recent weeks motivated the second-largest cryptocurrency to reach a new all-time high just above $2,500. At the time of press, ETH is trading just under this at $2,413. Market observers expect prices to surpass $3,000 in the short term and end the year above $5,000.
