Since its inception, Ethereum has been the dominant smart contract and decentralized application (DApp) network. Analysis of ethereum price (ETH) and market cap shows indisputable evidence that the blockchain has been gaining market share.
As the chart above shows, Ethereum’s dominance in terms of market capitalization has grown over the past few years, from an average of 18% in July 2021 to 20% currently. Excluding Bitcoin (BTC) from the analysis, Ethereum currently has a 40.6% market share, while its next competitor, BNB (BNB), holds a 7.2% share.
The differences between Ethereum and other networks are also evident when analyzing the total value locked (TVL) on each network’s smart contracts. Ethereum takes the absolute lead with a TVL of $24.6 billion, followed by Tron with $5.4 billion and BNB Chain with $3.3 billion.
The graph above depicts how Ethereum’s TVL market share dropped from 70.5% in June 2021 to 49.5% in May 2022, while Terra and Avalanche collectively gained 20% of the market. However, after the collapse of the Terra ecosystem in May 2022, which eventually caused developers to cease network activity, Ethereum quickly regained 58% of the market share.
Despite the emergence of DApps on the BNB and Tron blockchains, Ethereum’s leadership has remained undisputed over the past 12 months. This data shows no correlation to the total number of unique active wallets (UAWs) interacting with each chain’s smart contracts.
For example, according to According to DappRadar, WAX has 363,600 active users, followed by BNB Chain with 517,300 30-day UAW. These numbers are well above the Ethereum network’s 66,300 unique active addresses, but they reflect much lower transaction fees, leaving room for manipulation.
Decentralization Matters, Ethereum Stands Out From Competitors
The Ethereum ecosystem has the highest number of active developers at over 1,870, which is more than the next three competitors — Polkadot (752), Cosmos (511), and Solana (383) — combined .
Currently, the Ethereum network has over 700,000 validators with 99% of their balances locked in staking participating in the process. The threshold limit of 32 ETH per validator certainly inflates this number, but Lido, the largest known staking pool, control 32% staked, with Coinbase coming in second with 9.6%.
Therefore, it is safe to say that Ethereum is much less centralized in terms of development and validation than Tron, BNB Chain, and Solana.
Despite Bitcoin reaching 50% market share on June 19, Ethereum’s dominance is still on the rise, other reasons include derivatives activity and its dominance of the NFT market
Derivatives Markets Are Crucial for Institutional Investors
Future contracts on Ethereum are critical to institutional trading practices such as hedging and leveraged trading. Cash-settled futures on ethereum join CME in February 2021. So far, no other cryptocurrency other than bitcoin has entered the world’s largest derivatives exchange.
In futures markets, there is always a balance between longs and shorts, but having a large number of active contracts (open interest) allows participation by institutional investors who require a minimum market size. Ethereum futures have a total open interest of $5.4 billion, while rival BNB holds $380 million and Solana holds just $178 million.
Ethereum remains the market leader in NFTs
Non-fungible tokens are a perfect example of how cheaper, faster transactions don’t always translate to greater adoption. There’s nothing stopping NFT items from being transferred between blockchains, whether it’s a new listing or an existing collection. In fact, the y00ts and DeGods moved to Polygon as early as 2023.
Despite facing gas fees that regularly top $10, Ethereum still maintains an absolute lead in terms of number of buyers and total sales.According to leading network CryptoSlam arrive Sales over the past 30 days were $380 million, while Solana, Polygon, and BNB Chain had combined sales of $93 million.
Ultimately, data favors ethereum over its competing smart-contract-centric blockchains. Positive trends in ethereum dominance may fade over time if promised network upgrades that allow for parallel processing (sharding) don’t materialize, but for now, ethereum’s 20% market cap share remains unchallenged .
This article is for general informational purposes only and is not intended and should not be construed as legal or investment advice. The views, ideas and opinions expressed here are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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