Ethereum Regains DeFi Market Share as Stablecoin Volume Surges Past $480B in May

Ethereum is making a significant comeback in 2025, reclaiming its leadership position in decentralized finance (DeFi) as rising stablecoin activity and automated trading bots breathe new life into the network. According to data from CEX.io, Ethereum’s Layer 1 processed a record-breaking $480 billion in stablecoin transfers during May—driven primarily by automated bots executing over 4.84 million transactions.

What’s Fueling Ethereum’s DeFi Revival?

The renewed activity stems from a combination of lower gas fees, improved infrastructure, and a renewed user interest in payment-centric DeFi applications. After years of watching liquidity drift to alternative chains and Layer-2 networks, Ethereum is once again gaining market share.

Lead analyst Illia Otychenko at CEX.io attributes this resurgence to more affordable on-chain activity in early 2025, which lowered entry barriers and helped redirect liquidity back to the mainnet. As a result, Ethereum’s stablecoin market cap on Layer 1 grew 11% year-to-date, while Layer-2 stablecoin activity dipped only slightly—by 1%.

Bots: From Villains to Validators of Efficiency

While trading bots have historically drawn criticism for exploitative strategies like MEV (Maximal Extractable Value) and sandwich attacks, they are now being recognized for improving liquidity and market efficiency.

CEX.io’s report highlights that bot-driven stablecoin swaps dominated Ethereum’s DEX activity—accounting for 37% in April and 32% in May. These high-frequency trades are pushing Ethereum toward becoming a stable, efficient settlement layer for both crypto-native and real-world financial applications.

Ethereum stablecoin market cap year-to-date change within the Ethereum ecosystem. Source: CEX.io

Read More: Understanding MEV and Its Impact on Uniswap Token Holders

USDC Leads the Charge

USDC, issued by Circle, emerged as the most-traded asset on Ethereum during this shift in user behavior. This trend suggests a broader transformation in Ethereum's role—from a speculative asset platform to a backbone for real-world value transfer, especially in emerging markets.

Challenges Ahead: Cross-Layer Fragmentation

Despite this momentum, Ethereum still faces major hurdles. Chief among them is liquidity and cost fragmentation across Layer 1 and Layer 2 networks. Otychenko emphasized that addressing these challenges is critical if Ethereum wants to maintain its lead.

“This isn’t just a technical problem—it’s strategic,” he said. “Ethereum must solve fragmentation issues if it wants to dominate the next wave of DeFi innovation.”

Real-World Adoption Through Stablecoins

According to Otychenko, the shift toward stablecoin infrastructure isn’t a short-term trend—it’s a signal of Ethereum maturing into a global financial backbone.

“Speculative tokens come and go, but stablecoins solve real problems,” he noted. “They provide fast, reliable, borderless payments—which is exactly what emerging markets need.”

As Ethereum doubles down on becoming the primary settlement layer for DeFi and stablecoins, the future hinges on continued innovation in scalability, cost-efficiency, and cross-layer liquidity management.

Key Takeaways:

• Ethereum hit a record $480B in stablecoin volume in May 2025, driven largely by automated trading bots.

• USDC is now the most-traded asset on Ethereum.

• The network saw an 11% increase in Layer-1 stablecoin market cap this year.

• Analysts warn that cross-layer liquidity fragmentation could stall Ethereum’s momentum if not addressed.

• Stablecoins are seen as Ethereum’s gateway to real-world adoption, particularly in emerging markets.

Ethereum’s resurgence signals a new phase in DeFi—one grounded in utility, stability, and scalable payments. If it continues on this path, it could cement its role as the foundational infrastructure for the future of finance.