Deep Dive: The status of the Ethereum network

On Chain Analysis

In this section, we delve into the on-chain data of the Ethereum network and analyze the growth and adoption of the network. The analysis is performed through various metrics such as network activity (expressed in the number of transactions on the network and DeFi usage) and network growth (expressed in number of wallets).

Network activity

Network activity is an important metric for a healthy network. The more activity on the network, the more demand there is for the underlying token. To gain insight into network activity, we look at the number of transactions on the network and its growth and the use of DeFi (Decentralized Finance) protocols.

Network Transactions

Figure 2 shows the number of transactions on the Ethereum network. It is clear that the number of transactions on the network has experienced a decreasing trend in the past month. It is striking that in December there was still a strong peak in the number of transactions of more than 1.9 million transactions in one day. We currently see an average of about 900,000 transactions per day.

Although there is a decrease in the number of transactions, the total number of transactions is still relatively high on the network, in comparison Bitcoin (BTC) is currently experiencing around 300,000 transactions per day (source; Glassnode) and Cardano (ADA) is experiencing an average of 230,000 transactions per day (source; Messari).

Nevertheless, the number of transactions has remained relatively strong over the past year despite the bear market, at the peak of the market we saw an average of 1.2 million transactions per day, where it currently stands at 0.9 million transactions per day. This equates to a 25% drop while we saw the price fall by more than 70% from its peak.

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