Ethereum DApps boom: growing volume and questions about ETH price

Ethereum DApps boom: growing volume and questions about ETH price

Ethereum, as one of the most dominant blockchain platforms, has recently seen a surprising increase in the volume of decentralized applications (DApps) by a staggering 38% over the past month. Even though Ethereum excels in many ways, the price of its cryptocurrency, Ether (ETH), is still hovering around $3,116.21 and is under pressure to stay above $3,200. Cryptocurrency experts are now asking: Will this rise in DApps volume be followed by a rise in the price of ETH?

Over the past month, Ethereum has reached an impressive onchain volume of $149.9 billion. By comparison, its closest rival, the blockchain BNB, has only posted $26.6 billion, down a respectable 82%. This uneven growth in DApps volumes reaffirms the strength of Ethereum, which still maintains its dominant position despite higher average transaction fees (approximately $7.50).

While critics of Ethereum claim that high fees hinder adoption, they ignore the growing popularity of second-layer solutions such as Arbitrum, Base and Optimism. These solutions rely on the security of Ethereum's base layer and create incentives for a growing number of validators and staking.

On the other hand, solar blockchain Solana has emerged as serious competition in recent weeks. With an 83% increase in onchain volume and a total locked-in value of $8.3 billion, Solana is emerging as a threat to disrupt Ethereum's dominance, despite its total TVL of $59.4 billion. Solana has also dominated volumes on decentralized exchanges (DEXs), attracting more users to its DApps.

Despite this growth, Ethereum still has a satisfactory performance in generating fees. In the past 30 days, Ethereum generated $163.7 million in fees, while Solana attributed $133.4 million and Tron remained in third place with $51 million. While some critics point to issues with the layer-2 rollup solution, Solana faces similar challenges regarding staking rewards, where the adjusted yield is far lower than the returns offered by Ethereum.

Ethereum is now focusing on a strategy of increasing scalability to improve its competitiveness. Innovative approaches such as the reintroduction of sharding and the use of the zero-knowledge Ethereum Virtual Machine (zkEVM) should allow Ethereum to increase the amount of transactions per second and strengthen its market position.

In summary, Ethereum has the potential to outperform the broader altcoin market capitalization, but its success will depend on its ability to effectively execute its scalability plans and keep up with the growing interest in decentralized applications that are accompanied by increasing transaction volumes. Who knows, we may soon see a new boom in the price of ETH.

*This is not investment advice.

Coingarage team