As the bull market enters the altcoin season, time seems to be running out for ETH. Since the beginning of this upward cycle in late 2023, ETH's performance has been under scrutiny. However, ETH's recent performance has been somewhat underwhelming. The most直观的 metric—price increase—shows ETH's maximum gain at 170% since October 2023, struggling to break through the $4,000 resistance. In contrast, BTC surged over 300%, while SOL skyrocketed by 1,300%. Many anticipated ETH to lead the altcoin rally, but as older altcoins recently spiked, ETH's momentum appears lackluster.
Is Ethereum, the leading smart contract platform, undervalued or performing as expected? Has age caught up with it, or does it still have fight left?
On-Chain Data Stagnates for a Year
From an on-chain perspective, PANews observes that Ethereum has shown no significant growth over the past year—neither declining nor advancing.
Daily Transactions Flatline
The daily average transaction count, a critical activity metric, has remained almost unchanged.
- December 8, 2023: 1.18M transactions
- December 8, 2024: 1.22M transactions
- A temporary spike to 1.96M occurred in January 2024, but activity otherwise hovered between 1M–1.3M.
Gas Fees Plummet
- Early 2024: Average gas fees ~40 Gwei (peaking at 100 Gwei).
- Mid-2024: Fees dropped sharply to 0.3 Gwei (July–September), reflecting reduced demand.
- Currently: Fees linger below 20 Gwei, a stark contrast to Ethereum’s high-fee reputation that once fueled Layer 2 adoption.
Active Addresses Show No Growth
- Daily active Ethereum and ERC20 addresses remain at pre-bull market levels, mirroring the transaction trend.
User Migration to L2, Capital Stays on L1
Where have Ethereum’s users gone?
- One year ago: Ethereum’s active addresses comprised 50% of all Layer 2 (L2) activity.
- Today: Ethereum accounts for just 24%, while L2s dominate.
Chain Activity Shifts
- December 2023: Ethereum led with 32.48% of activity.
- December 2024: Base chain claims 50%, Ethereum slips to 19%, and Arbitrum holds 9.2%.
TVL Tells a Different Story
- Stablecoin TVL on Ethereum: 91% (down from 95% in 2023).
- Total TVL: **$77.5B** (up **2.69x** from $28.8B in December 2023).
Per-User Value:
- Ethereum: $178,700
- Base: $3,315
- Solana: $1,972
Despite declining activity, Ethereum remains the preferred hub for high-value transactions, underscoring its role as a "whale sanctuary."
Uniswap’s Potential Exodus: A Deeper Threat
Uniswap remains Ethereum’s top DEX, handling 97% of mainnet exchange volume. However, its possible migration to Unichain could devastate Ethereum’s ecosystem:
- Economic Impact: Validators may lose $400M–$500M annually.
- Gas Burn Threat: Uniswap’s router accounts for 14.5% of Ethereum’s gas fees (~$1.6B in ETH burned).
If Uniswap departs, Ethereum’s deflationary narrative—and its fee-driven security model—could unravel.
Conclusion: Ethereum’s Pivot
Ethereum’s mainnet is transforming into a high-security liquidity pool for institutional players, while retail activity migrates to L2s and rivals like Solana. Its strengths—security and liquidity—are now its last moats. Whether ETH is undervalued hinges on whether the market prizes these attributes over speculative altcoin hype.
FAQ
Q: Why has ETH underperformed BTC and SOL?
A: ETH’s utility-focused design lacks the speculative frenzy driving meme coins and newer L1s. Its growth now depends on institutional adoption and L2 scalability.
Q: Are Layer 2s cannibalizing Ethereum?
A: Partially. L2s divert retail activity but rely on Ethereum’s security. Think of them as expanding, not replacing, Ethereum’s ecosystem.
Q: What’s the biggest risk to Ethereum?
A: Dapp migration (e.g., Uniswap) could reduce fee revenue, weakening ETH’s deflationary mechanism and staking rewards.