Ethereum, the first and largest blockchain network in the world for decentralized finance (DEFI), celebrated its tenth anniversary last week with signs of a potential return to form. After years of underperformance compared to bitcoin, its ether of indigenous cryptocurrency jumped more than 50% in July-a movement of long-term investors considers it as promising.
Despite the pioneers of many most important innovations in digital assets – PEE ready, start -up financing, stablecoins, NFTS and even digital currencies supported by the State such as the Brazil – Ethereum Drex, because of its high transaction costs, its slowly reproducible opening code and its environmental concerns and its environmental concerns concerning its energy consumption. The latest problem was resolved two years ago when Ethereum went from validation of work proof, unlike Bitcoin.
Transaction costs should fall more after the deployment of May of the “Pectra” upgrade, which has already stimulated the activity of the network.
Directed by a non -profit foundation and maintained by an open community of developers, Ethereum is now hosting more than 1,400 DEFI applications built by crypto startups and has a total locked value (TVL) – The cryptocurrency volume deposited in rear protocol operations – of 79.4 billion dollars. It is almost ten times more than its nearest competitor, Solana, which currently holds $ 9.5 billion on TVL. Before the Pectra update in April, Ethereum TVL amounted to $ 49.5 billion, according to Defilma. The number of digital portfolios active on the Ethereum network now totals 834,900, based on Etherscan data.
“Ether had an impressive July, earning more than 50%, far exceeding the 8% Bitcoin increase,” said Theodoro Fleury, CIO at QR Asset. “Measured against Bitcoin, Ether had fallen 80% compared to his 2022 peak. Now he recovers part of this lost terrain.”
Ethereum’s decline came while rival networks seemed to overcome it. The chief of them was Solana, who offered faster speeds and significantly lower transaction costs. Presented by a wave of coins – digital assets inspired by internet jokes – The Solana token rose 830% in 2023 and added an additional 110% in 2024. Ether gained 96% and 42% to these years, respectively, still far from its top of all time of $ 4,878 in 2021.
During maximum congestion, Ethereum’s “gas costs” – the cost of execution of transactions – have exceeded $ 100, which makes small operations prohibitive. Solana, on the other hand, constantly offers costs in the lower hundred.
Until recently, the bypass solution was to unload the activity to “Layer -2” blockchains – networks that reflect Ethereum but offer faster and cheaper transaction treatment. Solutions like Arbitrum and Optimism manage the operations of the main Ethereum chain and later submit compressed summaries. However, Pectra upgrade has already reduced the costs even on the central layer of Ethereum.
According to Valter Rebelo, chief of the cryptocurrency in Empiricus, the loss of favor of Ethereum in the cryptographic community came largely from the low price performance of Ether. But institutional investors have returned via negotiated funds on the stock market (ETF), and as the real uses of Ethereum develop beyond crypto-native circles, feeling changes.
In July, ETF based on ether on American exchanges attracted about $ 5 billion in admissions.
“Ethereum is essentially digital oil – you can connect data and applications,” said Rebelo, highlighting his central role in the main financial innovations such as stablecoins.
Stablecoins are digital tokens fixed to fiduciary currencies such as the US dollar. They maintain this PEG through reserves of equal or higher value and serve as 24/7 digital equivalents to exchange markets – without traditional costs. According to Defillama, Stablecoin market capitalization on Ethereum is $ 132.8 billion. Tron ranks second with $ 82.8 billion and Solana travels $ 11.4 billion.
For the future, Ethereum could benefit more from the regulatory impetus behind the stablescoins in the United States “the best DEFI applications are still on Ethereum. TVL is still there,” said Rebelo, who thinks that Ether could drop from $ 3,500 to $ 10,000 to $ 10,000 in the current market cycle.
The volume placed in Ethereum is almost ten times larger than its main competitor, Solana, which has a TVL of 9.5 billion US dollars. At the end of April, before the Pectra update, Ethereum TVL was 49.5 billion US dollars, according to Defilma Data. Currently, the total number of digital portfolios active on the network, which measures the commitment of the participants, is 834,900, according to Etherscan.
Theodoro Fleury, director of investments at QR Asset, noted that Ether had an impressive performance in July, appreciating more than 50%, considerably exceeding Bitcoin, which increased by 8%. This has followed several years of reverse behavior. “When we measure the ether against bitcoin since the peak in 2022, there was a drop of 80% of the relative value,” he explains. “It reveals part of the lost field.”
The drop occurred because other blockchains seemed to challenge Ethereum, a project initiated by the developer Vitalik Buterin. The main competitor was Solana, known to be faster with lower transaction costs. Fueled by the rise of “same”, digital coins based on internet jokes, the Solana token jumped 830% in 2023 and won an additional 110% in 2024 – while the ether increased by 96% and 42% respectively in the same years, without ever recovering its peak of 2021 of 4,878 US.
During high network congestion periods, the “gas costs” (transaction costs) to execute an Ethereum order reached US $ 100, which makes transactions smaller. Solana, on the other hand, has always offered costs in the hundred beach.
Until recently, the solution was to count on second -layer blockchains – similar to “complementary modules”, created in a similar way to Ethereum but more agile and affordable. The examples include arbitrum and optimism, which treat transactions outside the main layer of Ethereum but later recorded a summary on the original network. However, the recent Pectra update has reduced the transaction costs even on the main layer of Ethereum.
Valter Rebelo, chief of cryptographic active ingredients in Empiricus, noted that the generalized perception in cryptographic communities that Ethereum was dying or losing ground from the poor performance of the prices of the ether token. When institutional investors began to channel funds in the cryptocurrency through the stock market-negotiated funds (ETF), and the blockchain thesis has gained ground beyond the native crypto environment, people have again started to assess the network, he said. In July, investments in ETF Ether on American exchanges totaled around $ 5 billion.
“Ethereum is essentially a digital oil that can connect countless databases and applications,” explains Rebelo. He emphasizes that the theses of the popular market in traditional finance, such as the Stablecoins, are closely linked to the success of the blockchain.
Stablecoins are cryptocurrencies with values set for traditional currencies such as the dollar. They maintain parity through reserves held or superior to the value of the tokens issued, acting effectively as a digital representation of the exchange markets, operating 24/7 without typical market costs. Defilma reports that the market value of stablescoins on Ethereum is 132.8 billion US dollars. On Tron, the second largest network of these cryptocurrencies, capitalization is 82.8 billion US dollars, while on Solana, it is $ 11.4 billion.
For the future, Ethereum could benefit from the regulatory dynamics of stablescoins recently received in the United States “the best applications are there. The TVL is there,” explains Rebelo. The expert estimates that Ether could go from current $ 3,500 to US $ 10,000 in this market cycle.
