The on-chain ecosystem is experiencing significant differentiation as Solana continues to dominate high-frequency transactions, while Ethereum consolidates its position in high-value interactions. Recent data suggests that capital flows are increasingly favoring the principle of “the strong get stronger,” with emerging public chains thriving alongside a challenging environment for some side chains and Layer 2 (L2) solutions, which are beginning to see capital withdrawals.
Ethereum has retained its central role within the public chain space, boasting a net inflow exceeding $2 billion and achieving record highs both in terms of price and institutional allocations. While emerging public chains are drawing attention and funding, established players like Polygon are facing significant capital outflows, illustrating a trend where robust ecosystems enhance their dominance.
Following Bitcoin’s surge to a high of $124,000, the pace of capital inflow has moderated, yet the selling pressure remains relatively light, suggesting that the current price correction is merely a stage adjustment rather than a shift in market trend. Aave has emerged as a leader in the decentralized lending sector, having launched its Horizon platform to tap into the institutional-grade real-world asset mortgage lending market, thereby reinforcing its integration of decentralized finance (DeFi) with traditional finance.
The blockchain’s dynamic on-chain activity is highlighted by various metrics such as daily transaction volume, active addresses, and net cross-chain bridging traffic. Solana claimed the lead in transaction volume, with over 29 billion transactions in August, while maintaining a steady daily transaction count between 90 million and 100 million. Ethereum, on the other hand, surpassed 51.77 million transactions for two consecutive months, indicating a thriving mainnet despite the growth of Layer 2 solutions. The total value locked (TVL) in decentralized exchanges (DEX) on Ethereum reached $140.1 billion, pointing to robust capital utilization and shifting user behavior towards more frequent trading instead of merely locking assets.
As for active addresses, Solana led the charge with an average of 3.587 million daily active addresses, while Ethereum saw a record of approximately 543,000 daily active addresses, reflecting its user base expansion. Base, a newer L2 solution, has gained traction with over 1.2 million active addresses, demonstrating a significant impact in its ecosystem.
Examining transaction fees reveals Ethereum continuing to lead in high-value interactions with approximately $65 million in fee revenue in August, despite a slight decrease from the previous month. Solana, with its low-cost fee structure, demonstrated stable revenue between $1 million and $1.5 million per day.
In terms of capital flow, Ethereum’s net inflow of more than $2 billion solidified its position as the primary recipient of institutional investment. Despite Ethereum’s strong performance, polygons and other Layer 2s are grappling with substantial outflows, with Polygon experiencing a net outflow of over $1 billion, while other platforms such as Unichain and Arbitrum faced similar pressures.
With respect to Bitcoin, its key structural indicators signal a market adjustment with capital inflows slowing but profit-taking pressure remaining mild, indicating the potential for price stabilization rather than a downturn. The cost basis of Bitcoin has established solid support between $93,000 and $110,000, providing a cushion against further declines.
On the project front, Aave has reached new heights in decentralized lending, boasting a TVL of over $41.1 billion. Its forthcoming Aave V4 and Horizon platform signifies a strategic push into institutional finance, broadening the accessibility of DeFi services through traditional asset collateralization.
Similarly, Bio Protocol has made significant strides in decentralized science (DeSci) with its V2 upgrade that doubled its market capitalization to $200 million. The increased engagement from capital shows potential for continued growth as the project gears up to introduce new functionalities to automate research processes.
Overall, the on-chain landscape is increasingly defined by distinct strengths; established networks like Ethereum continue to thrive amid institutional interest, while high-frequency platforms like Solana secure user engagement. Concurrently, emerging projects like Aave and Bio Protocol exemplify innovation in their respective domains, maintaining their relevance and growth within the evolving ecosystem.
