Ethereum's ETH has bleeded consistently in the last two quarters, even Ripple’s XRP performed better than ETH and the latter is practically a centralized business with no large and active developer community for consumer products or services.
Although the top #2 crypto asset remains in a net-positive zone judging by yearly gains, the last two quarters has set it well on its way to closing the year with no positive growth.
I must say, it is crazy what a couple of sentiments shifts can do to an asset of the most active chain in an industry as crypto. Sure, Solana has been the memehub and more recently a “talent hub for writers and underexposed developers” through initiatives like “Superteam” but Ethereum has still remain a dominant force.
Speaking of dominant forces, the open network - TON saw explosive account growth following the airdrop and listing of Hamster Kombat’s in-game token, $HMSTR. accounts on TON grew from under 60million at the beginning of September to over 100 million post-listing of $HMSTR.
I guess the numbers weren't faked afterall. TON has effectively onboarded millions of “consumers” onchain. Daily transactions peaked on 27th September as the chain saw over 18 million transactions in a day and guess what?
It handled the traffic effectively and didn't result in being Solana for day, again. The new scaling tech works.
But let's not get distracted, TON has its flaws, like every other chain, the focus here is Ethereum and it's slow death - saved by layer 2s?
Arbitrum Hits 1 Billion Total Transactions
To truly understand how bad things look for Ethereum. TON, which I'd soon stop mentioning has broken many of Ethereum's records and it's developers network is yet to reach the size of Ethereum's.
My thesis is that Ethereum's slowed on-chain activities should be heavily due to the launch of numerous layer 2s as middle-class users flocked to those chains to avoid Ethereum's slow transaction speed and high fees.
Other layer 2s like Base is already at 755+ million total transactions and OP Mainnet at 347+ million according to The Block Reports.
Arbitrum One, a Layer 2 optimistic rollup for Ethereum, has crossed 1 billion transactions, reaching this milestone within three years of its mainnet launch in August 2021.
According to Blockscan data, its competitor Base has recorded 755 million transactions to date, while OP Mainnet has reached 347 million transactions.
Base, incubated by Coinbase, currently leads in daily transactions, with Arbitrum ranking second, according to The Block’s data dashboard.
The numbers don't lie, the spike of layer 2 networks for Ethereum has sustained the ecosystem as many would have moved to alternative layer 1s like Avax or Solana.
Ironically, this would also mean that layer 2s have sucked value from the Ethereum blockchain simply to sustain its name. The cost of retaining the reputation of being the most active “PoS-governed and smart contracts compatible chain” is losing actual value flow. Arbitrum’s TVL growth is evident net-negative for Ethereum, but that helps contain the investor's in the same “Ethereum bubble” as an ecosystem, so one can't really complain can he?
How long before it all goes to shit? I frankly don't think that will happen. It's all just business at the end of the day and there always has to be some Ls to take to stay competitive.
Its either that or Arbitrum/Base becomes a layer 1 and doesn't have to merit Ethereum and that value bridge gets lost. Such an event could significantly impact the community's trust in Ethereum's future.