Ethereum faces rising DEX competition amid market share decline
Ethereum (CRYPTO:ETH) remains a significant blockchain for decentralised exchanges (DEXs), but its market share has been declining, according to CoinGecko's Q3 2024 crypto industry report.
Despite maintaining its position, Ethereum’s share dropped below 40% during the quarter, with trading volume on its network decreasing by 19.6% compared to the previous quarter.
The report points to increased competition from other blockchains like Solana (CRYPTO:SOL) and Base.
Solana gained market share, reaching 22% with $21.5 billion in trading volume by the end of September.
Base, Coinbase's Ethereum Layer-2 (L2) solution, also saw growth, capturing a 13% share and $12.3 billion in volume, overtaking Arbitrum.
The rise of meme coins has driven much of this competition, with networks like Tron benefiting from these trends, securing 2% of the market share.
Ethereum’s overall crypto market dominance fell by 3.6% in Q3, settling at 13.4%, marking the largest drop among the top seven cryptocurrencies, despite the introduction of Ethereum ETFs in July.
However, the report highlighted positive developments in Ethereum’s ecosystem, particularly in Layer-2 scaling solutions.
Transactions across the top 10 L2s increased by 17.2% in Q3, with daily transactions on L2s reaching nearly 10 million by September, far exceeding the activity on Ethereum’s main network.
The growing use of L2 solutions suggests a shift in user activity to more scalable platforms, though this trend has raised concerns about Ethereum’s relevance.
Cyber Capital’s founder, Justin Bon, criticised the network, claiming that off-chain movements like Uniswap's (CRYPTO:UNI) shift signify Ethereum is losing its edge.
Conversely, BlackRock CEO Larry Fink offered a more optimistic outlook, emphasising Ethereum's growth potential during the firm’s Q3 earnings call.
At the time of writing, the Ethereum (ETH) price was $2,609.52.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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