As Ethereum (ETH) attempts to break through the $5,000 barrier, its trading volume is rising, but it is also facing intense competition, leading to a decline in network revenue and user attention.
According to Nansen data, Ethereum's daily trading volume is approaching its historical high, exceeding 1.7 million on Tuesday.
In contrast, Ethereum's layer-2 networks Arbitrum and Base recorded 3.4 million and 8.6 million transactions, respectively, while the competing layer-1 blockchain Aptos reached 3.8 million transactions on Monday.
Since 2018, the number of active addresses on Ethereum has fluctuated between 400,000 and 600,000, occasionally exceeding 1 million.
Data shows that Ethereum's traffic is being attracted by other blockchain networks, weakening its market share and revenue, prompting stakeholders to reassess Ethereum's smart contract network development strategy.
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Inconsistent Incentives and Next-Generation Blockchains Erode Ethereum's Market Share
As the world's first blockchain smart contract network, Ethereum is facing increasingly fierce competition from both within and outside its ecosystem.
Since 2022, the network fees on Ethereum's base layer have significantly decreased, partly due to the Dencun upgrade launching in March 2024, which greatly reduced fees on layer-2 networks.
Major high-throughput layer-1 networks like Solana and Sui are also competing with Ethereum for users and market share, forcing the Ethereum Foundation to reconsider its scaling and execution roadmap.
However, Marc Boiron, CEO of Polygon Labs, recently told Cointelegraph that competing directly with these new layer-1 networks on performance metrics could pose a 'danger' to Ethereum.
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