Ethereum isn’t just the biggest smart contract platform. It’s the financial plumbing underneath most of what actually matters in onchain finance, and Grayscale’s research team now has the receipts to prove it.

Grayscale Research, led by Zach Pandl, has published findings quantifying Ethereum’s grip on the three pillars of onchain finance: stablecoins, decentralized finance, and tokenized real-world assets.

The numbers behind Ethereum’s lead

The Ethereum ecosystem, including its growing constellation of Layer 2 networks, holds over 50% of all stablecoin balances as of mid-2025. The ecosystem also handles roughly 45% of stablecoin transactions measured by dollar value.

Ethereum commands approximately 65% of total value locked across decentralized finance protocols. That means roughly two out of every three dollars parked in DeFi lending, borrowing, and trading protocols sit within Ethereum’s orbit.

Nearly 80% of tokenized US Treasury products live on Ethereum. This corner of the market, where traditional government debt gets wrapped into blockchain-native tokens, has become a bellwether for institutional crypto adoption.

Institutional gravity keeps pulling toward Ethereum

Major firms including Coinbase, Kraken, and Sony have all built on Ethereum’s infrastructure for decentralized applications and settlement layers. In July 2025, ETH experienced a nearly 50% price increase alongside $5.4B in net inflows to spot ETH exchange-traded products.

Grayscale’s work includes an important caveat: strong onchain fundamentals don’t always translate directly into immediate token price performance. The relationship between network usage metrics and ETH’s market price has historically been inconsistent.

The competitive picture isn’t all rosy

Solana and BNB Chain continue to advance on speed and cost efficiency. If Ethereum processes 45% of stablecoin transactions by dollar value, that means 55% is happening elsewhere.

Ethereum’s Layer 2 networks help close this gap, but they also introduce complexity. Users navigating between mainnet, Arbitrum, Optimism, Base, and a growing list of other rollups face bridging friction, liquidity fragmentation, and occasional confusion about which chain their assets actually live on. The 50%-plus stablecoin balance figure aggregates across this entire ecosystem.

What this means for investors

The $5.4B in spot ETH ETP inflows during July suggests that large allocators are buying the thesis that Ethereum is the institutional-grade settlement layer for onchain finance. Institutional capital tends to be stickier than retail money, which could provide a more stable demand floor for ETH compared to previous cycles.

If Ethereum’s Layer 2 ecosystem captures most of the growth while transaction fees on mainnet stay compressed, the value accrual to ETH itself becomes a more nuanced question. Validators earn less when activity moves to rollups, even if the broader ecosystem thrives.