Ethereum Network on Pace to Settle $8 Trillion in 2021

Ethereum prices may still be tanking, but its properties as a financial settlement layer have never been stronger.

According to Messari’s second-quarter decentralized finance review, the Ethereum network has settled $2.5 trillion between April and June this year.

It added that this represents a gain of more than 65% quarter on quarter and almost 1,500% year on year. If the current pace continues, the Ethereum network could settle $8 trillion by the end of this year, Messari noted.

Researcher Ryan Watkins stated that the largest driver of this growth continues to be DeFi and stablecoin activity.

Ethereum
Ethereum transaction volume – Messari.io

For the same quarter in 2020, when the DeFi sector was just starting to bubble up, $159 billion was settled on Ethereum. Going back a year to 2019 when markets were still largely bearish, just $73 billion was settled on the network.

Ethereum whales have also been increasing their holdings with the top ten ETH wallets now controlling more than 20% of the entire supply.

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Stablecoin Activity Surging

Stablecoins still made up about half of the total settlements for the quarter despite the decline in ERC-20 based ones on Ethereum.

Messari noted that in Q2 2021, the stablecoin monetary base reached over $107 billion, up 70% since Q1 and more than 800% year-over-year. The three-month period has facilitated $1.7 trillion in transaction volume for stablecoins, up 1,090% year-over-year and 59% since Q1, the report added.

The biggest growing stablecoins in Q2 were USDC, BUSD, and DAI which grew their market share to 23%, 9%, and 5%, respectively. USDT is still the market leader however its dominance is gradually fading as rivals eat into its share.

According to the Tether transparency report, its total supply is currently 62.4 billion – an increase of 197% since the beginning of the year. Of this total, less than half or 30.9 billion USDT are on the ERC-20 token standard. Slightly more are on the Tron network which has 32 billion USDT.

USD Coin has vastly outperformed Tether this year in terms of growth with a supply surge of 577% since the beginning of the year to a record 26.4 billion USDC circulating today.

Ethereum Price Weakens

Despite Ethereum’s bullish transaction figures, the underlying asset continues to weaken. ETH prices are still below the psychological $2K level, trading at $1,970 at the time of press. According to CoinGecko, Ethereum has taken a 15% hit over the past week and is currently down 54.7% from its mid-May all-time high.

On July 7, it was reported that Goldman Sachs still views Ethereum as bullish due to its use-cases and smart contract capabilities.

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