The state of Ethereum in Q3 2025

In brief

• Ethereum dominates on-chain value: TVL rebounded strongly in Q3 and remains massively concentrated on this blockchain.
• Tokenisation: the market is making slow progress, but institutions are almost systematically choosing Ethereum.
• Layers 2: the landscape is polarising around a few winners (Base, Arbitrum).
• DeFi vs fintechs: DeFi protocols are achieving AUMs comparable to fintechs and are becoming credible partners.
• ETH prices: Ethereum clearly outperformed in Q3, driven by a massive influx of institutional capital.
• ETFs: AUM exploded in Q3 and the market is largely concentrated around BlackRock.

Important news from Q3 2025

Final tweaks before the Fusaka update

The Fusaka update, due on 3 December 2025, should significantly improve Ethereum. Its core component, PeerDAS, reduces the amount of data that nodes need to store, allowing Layers 2 to greatly increase their capacity while lowering costs. Fusaka also introduces dynamic blob adjustment, more transactions per block and true pre-confirmations, bringing the user experience closer to traditional payment standards.

ETFs and treasury companies boost institutional adoption

On the institutional front, the summer of 2025 marked a turning point: spot Ethereum ETFs attracted $9.6 billion in Q3, surpassing those of Bitcoin. At the same time, "treasury companies", listed companies dedicated to holding ETH, already total 4.34 million ETH ($15.2 billion), dominated by Bitmine, Sharplink Gaming and The Ether Machine. Some are considering allocating some of their reserves to DeFi to generate returns.

A clearer regulatory framework that secures the Ethereum ecosystem

The United States has clarified the regulatory framework with two major pieces of legislation: the GENIUS Act, which provides a strict framework for stablecoins, and the CLARITY Act (still requiring a vote in the Senate), which aims to put an end to the SEC/CFTC conflict and proposes a clearer framework for DeFi. As Ethereum concentrates the majority of stablecoin and DeFi activity, these advances further strengthen its central role in the global financial infrastructure.

TVL: Ethereum dominates onchain value

The TVL of on-chain applications rebounded sharply between July and September, rising from $96.1 billion to $156.9 billion across all blockchains. On Ethereum, it rose from 60.1 to 88.7 billion, driven in part by the rise in ETH but above all by the massive return of leveraged return strategies.

These set-ups (often based on wstETH used as collateral to re-borrow ETH and re-staker it) have seen renewed interest, amplified by the attractive terms around Ethena's sUSDe.

Ethereum money markets (Aave, Morpho, Euler, Fluid) captured most of this demand, while Maple, positioned on under-collateralised institutional loans, saw its TVL double to 2.6 billion.

Taken together, this confirms a structural trend: despite competition from other chains, valuable on-chain liquidity remains concentrated on Ethereum, which continues to serve as the backbone of DeFi's lending and borrowing activities.

Tokenisation: a market making progress, but still far from mass take-off

The market for tokenised real-world assets is growing, but without any major acceleration. In Q3, Ethereum's share of this segment rose from 52.1% to 54.6%, a moderate increase that reflects the current limitations of RWAs: still poorly integrated into DeFi and accessible mainly to accredited investors, they are struggling to achieve widespread adoption.

Despite this, institutional initiatives are multiplying and almost all choose Ethereum as their foundation. UBS gave an illustration of this by executing its first tokenised fund transaction directly on the network, automating several steps thanks to smart contracts and Chainlink oracles - proof that the operational efficiency promised by tokenisation is beginning to materialise.

Another trend that is emerging is the decoupling of the use of RWAs from the blockchain that carries the assets. The example of Ethena's USDtb is telling: the stablecoin circulates solely on Ethereum, but some of its collateral (notably BlackRock's BUIDL money fund) is now spread across several chains. A way of diversifying the infrastructure while keeping Ethereum as the main layer of activity.

Layers 2: a polarising landscape

Tracking daily transactions on Ethereum and its main L2s shows increasing polarisation: a few networks now concentrate most of the momentum, while others are gradually fading away.

Base is the clearest example of this. Buoyed by Coinbase's onchain integration (which now distributes services such as Morpho loan markets from its app) the network is making its mark without a massive incentive programme. The idea of a BASE token is circulating, but the chain is already progressing as if it didn't need one.

Arbitrum, meanwhile, is consolidating its second place thanks to a dense DeFi ecosystem and applications not found elsewhere: Ostium, which provides access to traditional finance assets, or Boros, which enables advanced futures rate trading. This diversity of uses gives it a structuring role in the L2 galaxy.

In contrast, some projects seem to be giving up the battle for the general public. ZKsync has relegated Era to the background to reposition itself as a technology provider, banking on its Prividiums (private L2s where only the operator can read the data) a direct response to the expectations of major institutions.

The landscape continues to expand, however. Robinhood is preparing an L2 dedicated to equity tokenisation, Jovay Network (backed by Ant Digital, a subsidiary of Chinese giant Alibaba) is working on its own network, and incumbent chains such as Celo and Ronin have migrated to become Ethereum L2s, reducing their costs while benefiting from increased interoperability.

AUM: DeFi follows in the footsteps of fintechs

The border between DeFi and fintech is rapidly shrinking. Some Ethereum applications now have an AUM comparable to that of players such as Revolut, a rapprochement illustrated by Aave, whose deposited value jumped 55% over the third quarter.

The launch of Horizon marks a turning point for the protocol: this separate market, designed for institutions, allows them to borrow via tokenised assets while letting any user provide liquidity. A compromise between regulatory requirements and capital efficiency, without abandoning the openness characteristic of DeFi.

This rise in power is all the more remarkable given that these protocols operate with tiny teams compared with fintechs or banks. Revolut is now in talks with Morpho and Aave to integrate their services directly. Onchain finance is no longer seen as a field for experimentation, but as a credible partner for the general public.

Price performance: ETH signs a strong comeback in Q3

Ethereum had a particularly strong summer: In the third quarter, ETH gained 68%, well ahead of bitcoin, which remained virtually stable, and well ahead of the Nasdaq (+18.6%) and the STOXX 600 (+3.1%). This net outperformance contrasts with the climate of uncertainty at the start of the year.

This rebound was driven by two dynamics. On the one hand, treasury companies accumulated more than $15 billion of ETH, creating new structural demand. On the other, Ethereum ETFs saw their flows accelerate after a timid start, reinforcing the network's institutional anchoring.

In short, Ethereum's rise in Q3 was not driven by classic crypto speculation, but by institutional capital that is taking root on a long-term basis. A signal all the more notable as the network prepares to deploy Fusaka and onchain activity continues to grow quarter after quarter.

ETF Ethereum: AUM explodes, concentration too

Ethereum ETFs changed scale in the third quarter. After a stagnant first half of the year of between $4 billion and $8 billion, their outstandings accelerated sharply from July onwards: over $20 billion in August, then peaking at close to $32 billion in September, buoyed by the arrival of major investors.

This expansion came with another major effect: a strong concentration of the market around a single player. BlackRock, with its ETHA ETF, is capturing most of the flows thanks to very low fees (0.25%, temporarily 0.12%), superior liquidity and the power of its brand.

The other issuers are struggling to keep up. Grayscale, hamstrung by its 2.5% fees inherited from the trust format, is losing appeal. Fidelity (FETH) and VanEck (ETHV) offer competitive fees, but lack the volume and awareness that allow BlackRock to crush the competition.

In just a few months, ETH ETFs have become a preferred channel for institutional exposure to Ethereum, but in a landscape where BlackRock is now the undisputed centre of gravity.

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