Ethereum DApp Volumes Increase 38% In One Month – Will ETH Price Follow?

The price of Ether (ETH) struggled to maintain levels above $3,200 between September 13 and September 19. But the parameters of Onchain have improved, especially when compared to Ethereum's direct competitors. Traders are asking how long it will take for Ether to continue its bull run as it dominates payments and network deposits.

No blockchain comes close to Ethereum's $149.9 billion onchain volume in the last 30 days. The second largest competitor, BNB Chain (BNB), reached only $26.6 billion, 82% less, despite offering much lower transaction fees. Above all, Ethereum's activity increased by 37.7% last month, while BNB Chain showed a 6% decrease.

Ethereum dominates in payments, TVL and share rewards.

Critics argue that Ethereum's average transaction fee of $7.50 hinders growth and retail adoption, but this view also addresses the use of layer-2 scaling solutions such as Arbitrum, Base, and Optimism. Ultimately, these networks rely on Ethereum's base layer for security and finality, creating incentives for more independent validators and depositors.

Solana Network's impressive growth may be Ethereum's biggest Achilles' heel, demonstrated by its impressive 83% onchain volume growth, with total value locked (TVL) at $8.3 billion. Despite its relatively low deposits compared to Ethereum's $59.4 billion, Solana leads decentralized exchange (DEX) volumes.

Ethereum remains the dominant payment force critical to network security, generating $163.7 million in payments in 30 days, Defillama said. Solana earned $133.4 million during the same period, while Tron was third with $51 million. Interestingly, Solana's three leading decentralized applications (DApps)—Raidium, Gito, and Photon—generated an impressive $338.5 million in payouts in just 30 days.

While critics of Ethereum point to the inadequacy of layer-2 bundle solutions in generating payments, Solana faces a similar challenge. SOL's stakeholders and investors are not benefiting from the success of DApps. According to StakingRewards, Solana's stock reward rate stands at 6.2% per annum, compared to a comparable SOL inflation rate of 5.2%, which means the adjusted profit is very small.

Inflation rate of Ethereum compared to ETH. Source: StakingRewards

In contrast, Ethereum staking offers an annual reward rate of 3.3%, with a corresponding ETH inflation rate of 0.7% or less. Although this difference may seem small at first, Ethereum's 2.6% adjusted return compared to Solana's 1% is an extremely attractive proposition. In practice, this puts Ethereum to hold institutional deposits, which is key to maintaining its leadership in Total Value (TVL).

Related: As memecoin craze returns, Solana-based DApps are powered by record payments

Ethereum's biggest challenge is the lack of a clear strategy without disrupting its layer-2 ecosystem, which benefits from blob space and relatively low-cost state bridging. Ethereum 3.0 aims to improve scalability by reintroducing sharding and implementing a zero-knowledge Ethereum Virtual Machine (zkEVM) at the base layer.

This innovative scaling approach enables multiple execution fragments, increasing transactions per second. Joe Lubin sees it as a way to add computing, but some speculate it may eventually eliminate packages. However, achieving these goals may take years.

From an onchain perspective and competitive advantage, Ether has the potential to further increase the capitalization of the broader altcoin market, but its success will depend on delivering the roadmap.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.