Ethereum DApp Volumes Surge 38% in a Month — Will ETH Price Follow?

Despite Ethereum (ETH) experiencing difficulty in maintaining prices above $3,200 between September 13 and 19, its decentralized application (DApp) volumes have seen significant growth. This has led traders to question whether ETH’s price will eventually reflect the rise in onchain activity, especially as Ethereum continues to dominate fees and network deposits.

Ethereum’s Onchain Volumes Continue to Outpace Competitors

Ethereum's dominance remains unchallenged, with its onchain volumes reaching an impressive $149.9 billion over the past 30 days. In comparison, its nearest competitor, BNB Chain, recorded only $26.6 billion—82% lower despite offering lower transaction fees. Ethereum's onchain activity surged by 37.7% over the last month, while BNB Chain saw a 6% decline in its volume.

This continued growth in Ethereum’s onchain activity highlights its dominance in the blockchain space, particularly in transaction fees and total value locked (TVL). Ethereum’s dominance in these areas remains critical for its long-term network security and growth.

Ethereum’s Leading Role in Fees, TVL, and Staking

Critics of Ethereum often point to its average transaction fee of $7.50 as an obstacle to retail adoption, but this overlooks the growing role of Layer-2 solutions like Arbitrum, Optimism, and Base. These networks rely on Ethereum for security and finality, contributing to an increase in staking deposits and independent validators.

Solana, which has shown impressive growth with an 83% increase in onchain volume, poses a notable challenge to Ethereum. Despite its smaller TVL of $8.3 billion compared to Ethereum’s $59.4 billion, Solana leads in decentralized exchange (DEX) volumes, thanks to its low fees and scalability.

However, when it comes to fees, Ethereum still holds a commanding position, generating $163.7 million in fees over the past 30 days, according to DefiLlama. Solana, despite its lower costs, earned $133.4 million in fees. This shows that Ethereum's ecosystem remains far more lucrative for developers and network participants, particularly when it comes to incentivizing validators.

Ethereum vs. Solana: Staking Rewards

While Solana has garnered attention for its DApp growth, Ethereum continues to offer more attractive staking rewards. Ethereum's staking rewards stand at 3.3% annually, with an inflation rate of just 0.7%, offering an adjusted return of around 2.6%. In contrast, Solana’s staking reward rate is only 6.2%, but its inflation rate is 5.2%, leaving a meager 1% adjusted return. This makes Ethereum a more appealing option for institutional investors looking to earn stable returns.

Ethereum's Path Forward: Scalability Challenges

Ethereum's biggest challenge remains scalability. Although Layer-2 solutions have helped reduce transaction costs, Ethereum’s base layer continues to face congestion issues. Ethereum 3.0, however, aims to tackle these scalability concerns by reintroducing sharding and leveraging zero-knowledge Ethereum Virtual Machine (zkEVM). These innovations could significantly increase Ethereum’s transaction throughput, positioning it for continued leadership in the blockchain space. However, full implementation of these features may take years.

Conclusion

Ethereum’s onchain metrics remain strong, particularly in DApp activity, fees, and staking rewards. The network continues to outpace its competitors in terms of total volume and market dominance, even though its price has struggled to maintain momentum. While Solana and other blockchains have posed a challenge, Ethereum's position as the dominant blockchain in terms of TVL, fees, and staking rewards remains unshaken.

The question now is whether Ethereum’s growing onchain activity will translate into a sustained price rally. As Ethereum works toward enhancing scalability with Ethereum 3.0, its potential to outperform the broader altcoin market remains intact, but much will depend on the successful execution of its roadmap.