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Ethereum remains a key player for advanced investors for several reasons:
Leader in DeFi. Ethereum hosts **over 50% of the total value locked in decentralized finance (DeFi)**. This means that most loans, decentralized exchanges, and DeFi protocols operate on Ethereum, ensuring sustained demand for ETH for fees and collateral.
Smart contracts platform. It was a pioneer in programmable smart contracts. It has thousands of applications and ERC-20 tokens, including high-volume projects like Uniswap (DEX) or OpenSea (NFT). This immense network of developers and users strengthens the ecosystem: being the preferred 'base chain', any innovation (new DApp or standard) is implemented first on Ethereum.
Continuous innovation and staking. Ethereum's roadmap ensures constant improvements (PoS transition, data layer for L2, etc.), attracting investors looking for active projects. Additionally, ~28% of the ETH supply is currently staked, providing an annual yield (~3%) for holders and reducing available liquidity. This induced scarcity dynamic (EIP-1559 burns part of the fees) favors long-term value.
Comparison with Bitcoin and Solana.
Unlike Bitcoin (PoW, limited to 21 million coins, focused on store of value) and Solana (PoH+PoS, extremely high speed >4,000 TPS but younger network and lower DeFi TVL), Ethereum balances security and scalability.
Its fees are historically higher than Solana's, but it offers greater decentralization and flexibility for smart contracts. In terms of tokenomics, ETH issues up to ~18 million per year (currently with low net inflation), while Bitcoin has a rigid cap and Solana has higher inflation (~4.5% annually).
For many investors, this combination of a robust ecosystem and continuous growth potential makes ETH an attractive bet.
In summary, Ethereum maintains a central position in the crypto ecosystem: it dominates DeFi, supports constant innovation, and offers unique advantages over other cryptocurrencies. Although its price has fallen in 2025, its technological and market fundamentals continue to attract capital—especially if the upcoming Ethereum 2.0 updates and institutional flows work in its favor.
Sources: Market prices and technical analysis of ETH, BTC, and SOL in 2025; reports from specialized media on DeFi trends, ETFs, and Ethereum updates.
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