ETH transaction count rising amid $5K push, but competition erodes market share

The Ethereum transaction number is rising amid Ether’s (ETH) propulsion toward the $5,000 milestone. However, accrued contention is eating into web gross and idiosyncratic mindshare.

Ethereum’s regular mean transaction number is hovering adjacent all-time highs, astatine implicit 1.7 cardinal transactions recorded connected Tuesday, according to Nansen.

Ethereum’s regular transaction number hovering adjacent all-time highs. Source: Nansen

For comparison, Ethereum layer-2 networks, Arbitrum and Base, recorded implicit 3.4 cardinal transactions and 8.6 cardinal transactions, respectively, and Aptos, a competing layer-1 blockchain, hosted 3.8 cardinal transactions connected Monday, according to The Tie.

Active addresses connected Ethereum person besides remained reasonably flat, fluctuating wrong a scope of 400,000-600,000 progressive addresses since 2018, with occasional spikes supra the 1 cardinal mark.

Ethereum progressive addresses person fluctuated wrong a scope since 2018. Source: Nansen

The information shows that overmuch of Ethereum’s postulation is being siphoned to different blockchain networks, which are eroding its marketplace share, eating into protocol revenues and forcing web stakeholders to reconsider a antithetic strategy for the astute declaration network.

Related: Is Zora turning Ethereum L2 Base into a Solana killer?

Misaligned incentives and next-generation blockchains erode Ethereum’s marketplace share

The world’s archetypal blockchain astute declaration network, erstwhile the undisputed champion of general-purpose astute declaration platforms, faces increasing competition from wrong its ecosystem and outer players.

Network fees connected the Ethereum basal furniture person plummeted since 2022, partially due to the Dencun upgrade, which went unrecorded successful March 2024, and importantly reduced web fees for Ethereum layer-2 networks.

Ethereum web fees successful steep diminution since 2021-2022. Source: Token Terminal

The upgrade incentivized users to power to these cheaper layer-2 solutions to prevention connected hefty web transaction fees, which could beryllium arsenic precocious arsenic $50 per transaction during times of congestion.

High-throughput layer-1 networks similar Solana and Sui are besides competing with Ethereum for idiosyncratic mindshare and a portion of the crypto market, forcing the Ethereum Foundation to adapt to the increasing changes and reconsider the network’s scaling and execution roadmap. 

Daily progressive users of major, prime blockchain networks. Source: The Tie

However, Polygon Labs CEO Marc Boiron precocious told Cointelegraph that attempting to vie with these newer layer-1 networks straight connected show metrics similar throughput mightiness beryllium “dangerous” to Ethereum.

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