Ethereum’s position in DEX trading is changing, according to the CoinGecko Q3 crypto industry report released on Oct. 14.
The network remains the dominant chain for decentralized exchange, but its market share consistently fell below 40% during the quarter.
Trading volume on Ethereum trended downward between July and September, with its cumulative volume 19.6% lower than the previous quarter, it noted.
Meme Coins Driving DEX Competition
Ethereum is facing increased competition from other chains in the DEX space, particularly Solana and Base. However, their popularity is primarily driven by degens minting meme coins.
Solana gained significant traction in DEX trading, ending September with a 22% market share and $21.5 billion in volume.
Base, the Coinbase Ethereum L2, grew its DEX market share by 31.4% in Q3, overtaking Arbitrum with a 13% dominance and $12.3 billion in volume by September.
Tron was a newcomer to the top ten after displacing Blast, which saw its volumes plummet following its token generation event.
However, this was also driven by meme coins following the launch of such a generator SunPump on Tron. The network managed to capture 2% of the market share with $1.7 billion in volume in September, according to CoinGecko.
ETH’s market dominance also took a beating in the third quarter. Its share of the total crypto market cap dropped by 3.6%, ending the quarter at 13.4%. This was the largest decline among the top 7 cryptocurrencies, despite the launch of Ethereum ETFs in July.
However, the Ethereum ecosystem saw substantial growth in layer-2 scaling solutions, with the total transactions across the top 10 L2s increasing by 17.2% in Q3.
Daily transactions on L2s nearly reached 10 million by the end of September, far exceeding Ethereum mainnet’s 1 million daily transactions, the report noted. This growth indicates a shift in user activity from the main Ethereum chain to more scalable L2 solutions.
ETH FUD Continues
Ethereum ecosystem developers have taken to crypto social media this week to dispute the waves of FUD that have plagued the network recently.
On Oct. 14, Cyber Capital founder Justin Bon added to the FUD stating that Uniswap moving off-chain “is only the final nail in the coffin, all apps are moving to competing L1s and L2s instead.”
“Now ETH is being left behind, irrelevant and broken; Ethereum is cooked.”
However, BlackRock CEO Larry Fink begged to differ, highlighting the growth potential of the Ethereum network during the firm’s Q3 earnings call this month.
And you’re still bearish on ETH? https://t.co/nb1E8tQMsO
— sassal.eth/acc (@sassal0x) October 14, 2024
