The Ethereum network continues to lead the way in decentralized application (DApp) adoption in terms of volume and deposits. While competing chains like Solana and BNB Chain benefit from lower transaction fees, which boost metrics like unique active addresses, there is nothing stopping well-funded entities from increasing Ethereum DApp volume.
In fact, the recent surge in activity on the Ethereum network is out of step with broader crypto market trends and even at odds with other usage metrics. While it is impossible to confirm any manipulation, it is worth noting that even with a significant transaction fee of $2.40, the metrics can still be distorted, especially in decentralized finance (DeFi) applications where deposits can exceed $1 billion.
Top blockchains ranked by 7-day DApp volume (USD) | Source: DappRadar
Notably, Ethereum was the only network among the top 20 to report increased volume, marking an impressive 83% growth over the previous week. Similar protocols such as BNB Chain, Polygon, Solana, and TON saw average volume declines of more than 30%. However, Ethereum’s 475,980 addresses pale in comparison to BNB Chain’s 1.18 million and Solana’s 1.62 million.
Interestingly, Ethereum’s volume growth does not correspond to an increase in users. Looking at the indicator of unique active addresses interacting with DApps, Ethereum has 8% fewer users than last week. While this is better than its competitors, it is paradoxical that volume has increased significantly.
So it can be inferred that despite fewer users due to relatively high fees, increased deposits into Ethereum may have offset the drop in activity.
Top blockchains ranked by total value locked into DeFi (USD) | Source: DappRadar
Data shows that the total value locked in Ethereum DeFi applications dropped by 17.5% over seven days, while competitors like Solana and Avalanche attracted deposits. Additionally, the number of DApp transactions on the Ethereum network did not increase during this period of spike in volume, suggesting that further analysis is needed to understand the anomaly.
Top Ethereum DApps Ranked by 7-Day Volume (USD) | Source: DappRadar
Ethereum’s volume growth was largely driven by Balancer’s 422% increase in seven days, totaling an impressive $40.6 billion. To put that in perspective, this is 13 times the total activity on BNB Chain during the same period. However, Balancer’s significant volume increase did not translate into improvements in other metrics, as the number of unique DApp addresses decreased by 5% and the number of transactions decreased by 14% in the same week.
Excluding Balancer’s contribution, Ethereum’s seven-day volume growth actually decreased by 5%, as this DApp alone accounts for 59.5% of the entire network’s volume. While it’s not uncommon for one DApp to dominate a blockchain’s volume (BNB Chain is largely driven by PancakeSwap, and Uniswap holds nearly 50% market share on the Polygon network), Ethereum’s reported activity growth should be viewed with caution, as DApp data may be distorted.
Determining the actual demand driving Balancer’s volume growth is challenging. Even if some DApp transactions yield marginal profits, this does not clearly indicate user intent. For example, the exchange Binance announced on July 1 that the Balancer token (BAL) had been placed on a watchlist for possible delisting, possibly related to unusual DApp activity, although establishing a direct link between the two occurrences is complicated.
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According to Cointelegraph
