Ethereum remains by far the largest smart contracts platform by market cap. Perched at second in the market cap leaderboard, the network hosts dapps cutting across multiple sectors.

While the Metaverse, gaming, and NFT activities have since dissipated, DeFi stands, looking at the steady recovery in total value locked (TVL), according to DeFiLlama.

DeFi Leads In Ethereum Gas Fees Generation

The dominance of DeFi in Ethereum goes on to show smart contracts and decentralized ledgers have revolutionized finance. To confirm this position, especially looking at trends in gas fees and the primary source over the years, the managing partner of DragonFly, took to X, sharing data from CoinShares.

After launching in Ethereum, CoinShares analysts note that gas fees continue to grow. There was a notable dip after the ICO mania of 2017 and 2018. The annual gas fees generated tanked from $143 million in 2018 to as low as $46 million in 2019.

However, after this contraction, which came after the crypto winter of 2018, gas fees generated exploded. The pickup in momentum coincided with the popularity of ERC-20 tokens, permitting protocols to issue tokens and the rising adoption of DeFi.

The resurgence in DeFi follows the launch of Uniswap, a decentralized exchange (DEX), in late 2018 and the introduction of the automated market maker (AMM) model, which decentralized liquidity provision. DEXs form a big part of DeFi. Some of the most popular DeFi protocols, looking at DeFiLlama, are DEXs like Curve and Uniswap.

From 2018 to 2020, the network derived its fees from ERC-20 transfers. However, as DeFi picked up steam on Ethereum in the last bull cycle from 2021, most gas fees have been from DEXs.

DEX Gas Fees Fall As ERC-20 And Stablecoin Transfers Grow, Blame Dencun?

Interestingly, gas fees from DEXs continue to fall, dropping from $2.4 billion in 2021 to $512 billion as of 2024. Meanwhile, as of September 2024, ERC-20 transfers are in second place, up from third, where it has been from 2021 to 2023. Last year alone, ERC-20 transfers, a decent portion from meme coins like PEPE and stablecoins, generated $223 million for validators.

Additionally, gas fees from layer-2s continue to slump, according to data. In 2023, Ethereum generated $247 million in fees from layer-2 platforms like Arbitrum and Optimism. According to CoinShares, it was at $90 million by the time of their publishing. The sharp drop is primarily due to the activation of Dencun.

Feature image from Canva, chart from TradingView

Despite scalability and high gas fees facing Ethereum, the founder of EigenLayer, a liquidity restaking platform, insists the network is superior, especially against Solana. Solana is the third most valuable smart contracts platform, trailing Ethereum and the BNB Chain. Over the years since launching, it has been gulping up more market share from Ethereum, cementing its position.

Is Ethereum Superior To Solana?

While the prominence of Solana is evident, Sreeram Kannan, the founder of EigenLayer, argued in a post on X that Solana prioritizes low latency and global node synchronization over other core features.

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On the other hand, Ethereum took a different approach, emphasizing the need for stability and decentralization. Accordingly, in Kannan’s view, the first smart contracts platform offers a more comprehensive solution than its competitor. Currently, EigenLayer manages over $12 billion worth of assets on Ethereum, according to DeFiLlama.

Although Kannan acknowledges the efficiency of Solana, the founder nonetheless picks out some limitations now that the platform is building a global state machine. At the top of the list is the blockchain’s sacrifice of programmability and verifiability.  

Meanwhile, the EigenLayer lead thinks Ethereum is excelling, especially on performance, thanks in part to the success of rollups and the resulting wild adoption. This off-chain solution provides instant confirmation and is more performant than web2 applications.

At the same time, Ethereum is programmable, enabling EigenLayer to add more features like an arbitrary decentralization of verifiable tasks. As a result, the liquidity restaking platform, Kannan adds, has enabled cloud-scale programmability.

Layer-2 Platforms Thriving: Why Is ETH Struggling?

The co-founder of Celestia, Mustafa Al-Bassam, also appreciates what Ethereum brings to the table and is absent or underdeveloped in other networks. In a post on X, Al-Bassam said the first smart contracts platform is “underrated.”

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Specifically, the co-founder lauded the thriving rollup ecosystem in Ethereum, saying it is “by far the largest and most successful.” As of September 30, L2Beat data shows that the layer-2 ecosystem in Ethereum manages over $38 billion, with Arbitrum and Base among the largest platforms.

Even as Base and other Ethereum layer-2 platforms draw activity, ETH, the native currency, is struggling for momentum. The daily chart shows bulls have yet to break above $2,800, although support remains at $2,400.

Dwindling upside momentum has been partly blamed on the proliferation of layer-2 scaling solutions. The network becomes inflationary as more activity is re-routed off-chain, and enhancements like Dencun are activated to make layer-2 transactions even cheaper. Looking at Ultra Sound Money, fewer ETH are not being torched.

Feature image from DALLE, chart from TradingView

Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part – in fact, far from it.

Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.

When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.

Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books – ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.

Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.

Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time – he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.

Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon – cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment – spreading the crypto gospel to the rest of the world.