Mastering the engine of on-chain finance

Important news from the 1st half of 2025

Reorganisation of the Ethereum Foundation

The Ethereum Foundation has completely overhauled its governance in recent months, separating its strategic governance (the board of directors) from its operational execution (the executive board). Vitalik Buterin, Aya Miyaguchi and Patrick Storchenegger now make up the 'security board', charged with protecting Ethereum's soul, while Hsiao-Wei Wang and Tomasz Stańczak (joined by Bastian Aue and Josh Stark) take the day-to-day reins with a clear mandate: to increase agility and clarity, tackling the ecosystem's challenges head-on, from scalability to zero censorship compliance. But this reform is not just cosmetic. The Foundation has revised its approach to cash management, moving from opportunistic ETH sales to a structured and transparent strategy, with part of its assets now injected into DeFi protocols. The latest move has been to streamline R&D, with targeted redundancies in favour of a more decentralised model. The aim? To put an end to de facto centralisation and make community builders more responsible.

End of SEC prosecutions against Uniswap

At the end of February 2025, the SEC discreetly ended its investigation begun more than two years earlier against Uniswap Labs, the main developer of the eponymous protocol. Although no formal charges have been brought and no financial settlement has been reached, this decision puts an end to one of the most closely scrutinised disputes in the industry. The agency, which has been in political difficulties for several months, reportedly recognised internally the legal complexity of qualifying Uniswap as a regulated player under US securities laws, particularly given its open source nature and the absence of tokens directly issued by the company. But this victory, however symbolic, does not mean a general acquittal. The SEC's decision creates no precedent and could be revised if the regulatory framework evolves or if new facts emerge. For Uniswap Labs, which had been preparing for months for a legal confrontation by reorganising its entities and strengthening its lines of defence, the end of the investigation validates its strategy of regulatory distancing. In particular, the company had argued that it controlled neither the liquidity nor the governance of the protocol, although many critics still point to the importance of its role in development and communication.

Strategic green light

On 10 April 2025, the SEC validated the listing of options on several Ethereum spot ETFs, including those from BlackRock, Grayscale and Bitwise. Following in the footsteps of Bitcoin ETFs, these new derivatives allow investors to bet upwards or downwards on the price of ETHs, without having to hold the asset itself. A technical advance, but above all a symbolic one: Ethereum now has access to the same risk management tools as the major asset classes, starting with equities and commodities. But this launch comes against a backdrop of measured interest. Unlike Bitcoin ETFs, which attracted tens of billions of dollars in just a few weeks, Ethereum ETFs have struggled to attract investors. Volumes remain low, and price momentum is lagging. The arrival of options could change all that, providing liquidity and attracting professional traders who are keen on leveraged products and complex strategies. For issuers such as BlackRock or Bitwise, the objective is clear: to make ETH not just a speculative asset, but a structured asset inserted into diversified portfolios.

Pectra update

The Pectra update, activated on 7 May 2025, is the densest evolution of the Ethereum protocol since The Merge, combining the execution (Prague) and consensus (Electra) components in a single hard fork. In total, 11 EIPs have been integrated, including several profound changes to account architecture, staking and scalability. At the heart of the project is EIP-7702, led by Vitalik Buterin, which introduces a new form of account abstraction, enabling external wallets to temporarily behave like smart contracts, with advanced signature, automation and recovery functions. This update is not limited to a technical overhaul. With EIP-7251, the cap of 32 ETH per validator is now raised to 2048 ETH, a change that facilitates the management of institutional staking, while raising concerns about centralisation. Pectra is also doubling its blob capacity, further reducing the cost of rollups and making Ethereum more attractive than its L1 rivals. These changes position the network to accommodate L2 applications on a large scale, without compromising its security.

AAVE crosses $25 billion TVL

In June 2025, Aave passed the $25 billion total locked value (TVL) mark, confirming its strong return to the top of decentralised finance. The lending platform co-founded by Stani Kulechov has seen its deposits double since the start of the year. The combined effect of rising on-chain yields, a renewed institutional appetite for passive income strategies, and better integration with Layer 2s (notably Base and Arbitrum) has created new momentum around the protocol. But this progress is not just quantitative. For several months now, Aave has been strengthening its technical offering with a more modular architecture, native integration of stablecoin fee payments, and better isolation of risks by market. The rise of the GHO stablecoin, although still limited, is also part of this strategic repositioning aimed at making Aave not just a decentralised lender, but a genuine onchain monetary infrastructure.

Ethereum consolidates its leading position in terms of deposited value (TVL)

Ethereum demonstrates continued supremacy in total locked value (TVL) in the blockchain ecosystem. Since the meteoric rise of decentralised finance (DeFi) in 2020, this protocol has established itself as the backbone of on-chain finance, concentrating the overwhelming majority of liquidity (over $60 billion by mid-2025). Although periods of decline marked 2022 and 2023, due in particular to the downturn in the crypto markets as a whole, Ethereum's resilience is clear: each time it recovers, its market share remains vastly dominant, far ahead of the other blockchains.

its Layers 2 like Arbitrum and Base have been gaining visibility since 2024, testifying to internal development within the Ethereum ecosystem rather than a flight to alternatives. This centralisation of value on Ethereum reflects a clear choice by developers and investors: that of an infrastructure deemed more secure, more mature, and better interconnected with institutional standards.

The proliferation of use cases (stablecoins, RWAs, lending, staking, etc.) is focused on Ethereum and its scaling solutions (L2). Despite the rhetoric about the emergence of a multi-chain world, Ethereum remains the preferred foundation for decentralised finance. At a time when regulators are gradually framing the sector and institutions are entering the market, this positioning reinforces the idea that, to build a credible and sustainable on-chain financial product, Ethereum is now unavoidable.

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More than 50% of RWAs are issued on Ethereum

The breakdown of tokenised real-world assets (RWAs) between the different blockchains is clear: Ethereum has historically dominated - and continues to dominate - the market, although its relative share has declined since 2022. Until 2021, Ethereum accounted for almost 100% of on-chain RWAs. This situation began to change from 2022, with the emergence of alternatives such as Tron, Solana, Binance Smart Chain and Arbitrum.

These new entrants gradually nibbled away at market share, reducing Ethereum's share to around 60% by mid-2025.

But despite this fragmentation, Ethereum remains the benchmark platform for tokenising real financial assets, thanks in particular to its security, liquidity and compatibility with regulatory standards. The progress of the other chains is still moderate, confirming that the use of RWAs is not moving massively but is spreading to the periphery.

Base establishes itself as the benchmark L2

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This chart illustrates the number of daily transactions on Ethereum and its main Layer 2 (L2) scalability solutions. The dominance of Base (in dark blue) is indisputable: this project developed by Coinbase is showing continuous growth, with a peak in excess of 14 million transactions per day at the end of 2025. This dynamism stands in stark contrast to other L2s, which operate in a much lower range, often below 2 million daily transactions.

This trend reflects several phenomena: firstly, Coinbase's distribution strength, which is attracting millions of users to its own network; secondly, a clear strategy of onboarding for the general public with low fees, a simplified UX, and concrete use cases (games, social applications, stablecoins). As a result, Base has become the most active blockchain in the Ethereum ecosystem in terms of transaction volume in less than a year.

In comparison, Optimism and Arbitrum, historically the L2 leaders, are maintaining sustained but stable activity, with curves that are not very volatile and no comparable growth peaks. This suggests a more DeFi or institutional-oriented user base, less conducive to virality. Other L2s such as ZkSync Era, Starknet, Scroll and Linea are struggling to take off, despite major technical innovations, notably around ZK rollups. Their adoption remains limited, partly due to the lack of external catalysts as powerful as the Coinbase effect.

Ethereum's main network, meanwhile, remains in retreat, with the number of daily transactions well below L2s, confirming the shift in activity towards scalability solutions. Ethereum is thus becoming a settlement base, while L2s are absorbing transactional activity. This chart therefore validates a central assumption of the Ethereum model: that of a modular architecture, where the base layer ensures security and neutrality, and the higher layers (particularly Base) capture mass market uses.

DeFi applications will soon be able to rival the major neobanks

There is still a significant gap between the outstandings managed by the main decentralised finance platforms (DeFi) on Ethereum and those of traditional banking institutions.

The bubbles representing JPMorgan ($3,875 billion) and BNP Paribas ($2,594 billion) largely dominate the visualisation, a reminder of the gigantic scale of traditional finance. In contrast, the DeFi protocols (although technological pioneers) still operate on very modest volumes: Aave has barely reached $25 billion, Morpho remains around $4 billion, and Euler is just over $1 billion.

However, one comparison draws particular attention: that between DeFi and Revolut. With outstandings of $40.91 billion, the British neobank represents a more recent financial intermediary, which has been able to capture a large customer base thanks to a mobile interface and fast services. DeFi as a whole is now approaching this threshold. Aave alone manages more than half of this amount.

If we add the volumes of Morpho, Euler or other emerging players, the convergence becomes tangible.

DeFi trading volumes rival the incumbent exchange players

This chart compares daily trading volumes between three market categories: CEX (centralised crypto exchanges), DEX (decentralised exchanges based on Ethereum), and Euronext Paris, the main French stock market. The analysis immediately highlights the predominance of CEXs in terms of liquidity, with regular peaks in excess of $70 billion, particularly around the winter of 2024-2025, a period marked by strong speculative activity. But the most striking element is the rise in power of DEXs, which operate on-chain on Ethereum. Although their volumes are still well below those of the CEXs, they now rival Euronext Paris. On several occasions, the volumes handled by the DEXs (yellow line) clearly exceed those of Euronext (brown line), whose daily trading volumes remain below the $5 billion mark. This crossover is symbolic: it shows that decentralised finance is no longer marginal, and that DEXs, long considered experimental or unreliable, are achieving levels of liquidity comparable to those of regulated exchanges that have been operating for decades. This is due to a combination of factors: the growing use of stablecoins, deep liquidity on Ethereum and gradual institutional adoption.

PS: We harvested data from Euronext Paris up to 1 May 2025.

ETH price underperformance relative to major tech stocks

The ETH token is clearly outperforming other financial assets, including those in the technology sector (Nasdaq and STOXX600), which are often correlated with crypto-assets. While Bitcoin posted a largely positive performance over the year (+60%), boosted by the launch of spot ETFs and strong institutional demand, Ethereum underperformed significantly, remaining in negative territory for most of the year, falling by as much as -40% before rebounding slightly in May. This divergence, visible from November 2024 onwards, highlights a dissociation between the two main cryptocurrencies, despite their history of correlation. ETH's underperformance calls into question the strength of its economic fundamentals in the short term. Despite strong activity on Layers 2, the tokenisation of real assets, and notable technological advances, market momentum is declining. This may be due to weak speculative traction or the absence of a catalyst equivalent to the 'ETF' narrative enjoyed by Bitcoin. This suggests that Ethereum is not yet seen today as a reserve asset or technology proxy as powerful as BTC or the big Nasdaq stocks, at least from an investor perspective.

Lower institutional appetite for ETH

The development of Ethereum ETF assets under management (AUM) since their launch in July 2024 highlights contrasting dynamics: after a roaring start driven by the conversion of the Grayscale Ethereum Trust, AUM stagnated for several months before registering a sharp rise at the end of 2024, followed by a correction, followed by a more moderate revival of interest in the spring of 2025.

The first phase, from July 2024, shows a sharp rise in AUM to almost $9bn, almost entirely attributable to Grayscale, whose existing fund was transformed into a spot ETF. Grayscale's dominance remained constant throughout the period, but its relative weight diminished slightly with the gradual entry of players such as BlackRock, Fidelity, Bitwise and VanEck. Notably between November 2024 and January 2025, a bullish wave takes AUM above $13 billion, partly linked to the price effect on ETH and growing speculation around the crypto ETF market.

From February 2025, the curve experienced a sharp decline, reflecting a fall in the Ether price and some disengagement, probably due to ETH's underperformance relative to BTC and a lack of catalysts equivalent to Bitcoin (such as the store-of-value narrative or macro-institutional flows). Since April, however, outstandings have started to rise again in a healthier manner, suggesting a consolidation phase in the market and a gradual return of interest in Ethereum from a more structural perspective.

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