Despite high gas fees and low transaction per second (TPS) rates, Ethereum continues to lead in several key areas:

• Total Value Locked (TVL)

• NFT volumes

• Stablecoin market cap

• Developer activity

Why Is Ethereum Still Leading?

1. **Superior Developer Tools: **
   Ethereum’s developer tooling is the best in the space, making it easier for developers to build and deploy applications.

2. Token Economics:
   Ethereum “burns” (buybacks) approximately 80% of user transactions — which can offset new issuance/consensus rewards paid to validators. The token had annualized deflation of -0.38% in Q1.

3. **Focus on Security: **
   The Ethereum Foundation continues to execute (The Merge, Shanghai upgrade, EIP4844, etc). The Ethereum Foundation and its community prioritize security, decentralization, and neutrality.
   a) Client Diversity: Ethereum’s client diversity is unmatched by any other blockchain.
   b) Rigorous Testing: The testing process for Ethereum updates are long and thorough.
   c) Reliability: Ethereum has never experienced downtime. 
   
   According to a recent study by Coin Metrics, attacking Ethereum would be more costly than attacking Bitcoin, although both are practically impossible to attack.

4. Established Trust:
   Ethereum has the Lindy effect, regulatory comfort, trusted partners like Coinbase, and real yield — attributes unique to Ethereum. These properties make Ethereum the go-to chain for institutions and large investors:
   a) RWA Projects: Ethereum is the default chain for RWA projects being developed by institutions.
   b) Tokenized Commodities: $84 million worth of commodities are tokenized on Ethereum.
   c) Tokenized US Treasuries: $476 million in US treasuries are tokenized on Ethereum.

Ethereum has kept the market share on TVL despite all these years as shown below because of the above property.

A closer look at Ethereum’s on-chain activity reveals:

• Leading Protocols: Lido leads with $27 billion in TVL. There has been a continuous reduction in TVL from Lido, moving towards EigenLayer and LRT tokens.

• EigenLayer’s Growth: Within a year, EigenLayer has attracted $14 billion, and with more AVS launched, more TVL is expected to flow to EigenLayer.

• TVL Distribution: 50% of TVL is in liquid staking and restaking protocols, followed by lending platforms like Aave, exchanges like Uniswap and Curve, and stablecoins like Maker and Ethena.

• Even though Uniswap is deployed on nine different EVM chains, 84% of the liquidity is still available only on the Ethereum Mainnet. Ethereum accounts for almost 70% of the total fees generated, yet the Ethereum Mainnet accounts for “only” 23% of all monthly active users (MAUs) on Uniswap. This same pattern can be observed with other applications.

Final thoughts:

Ethereum will continue to be the de facto chain for institutions and large investors for years to come, because of Token Economics, EF Focus on Security, Established Trust, Superior Developer Tools and lindy effect.

For builder: If you’re building a new type of Defi or RWA project choose Ethereum if your target users are whales or institutions.