Originally published on: November 19, 2024
The price of Ether has been fluctuating around $3,200, prompting questions about its future trajectory. Despite this, Ethereum’s decentralized application (DApp) volumes have surged by 38% in just one month, raising optimism among traders about a potential bull run for ETH.
Comparing blockchain networks by their 30-day DApp volumes, Ethereum stands unmatched with a staggering $149.9 billion in onchain transactions. In contrast, its closest competitor, BNB Chain, lags far behind at $26.6 billion. This disparity indicates Ethereum’s dominance in the market despite concerns about high transaction fees.
Critics of Ethereum argue that its average transaction fee of $7.50 is a barrier to growth. However, the increasing adoption of layer-2 scaling solutions like Arbitrum and Optimism is mitigating this issue. These solutions rely on Ethereum’s secure base layer, fostering growth and incentivizing validators and staking deposits.
While Ethereum leads in fees generated for network security, the rapid growth of the Solana network poses a challenge. Solana’s onchain volumes have surged by 83%, driven by a TVL of $8.3 billion. Solana also surpasses Ethereum in DEX volumes, highlighting its potential to disrupt the market.
Despite these developments, Ethereum remains an attractive choice for staking rewards. With an annualized reward rate of 3.3% and a lower inflation rate than Solana, Ethereum offers better returns for investors. This positions Ethereum favorably to capture institutional deposits and maintain its leadership in TVL.
Looking ahead, Ethereum’s scalability remains a key concern, with Ethereum 3.0 introducing sharding and zkEVM to improve transaction throughput. While this innovative approach holds promise for the future, achieving scalability goals may take time.
In conclusion, Ethereum’s performance in the coming months will be crucial in determining its position in the altcoin market. With growing DApp volumes and ongoing developments in scalability, Ethereum has the potential to outshine its competitors.
