Author: Token Terminal
Compiled by: Saoirse, Foresight News
Ethereum serves as the core underlying settlement network for on-chain assets, relying on ETH to pay transaction fees and stake to maintain network security. Traditional finance suffers from issues like slow settlements, numerous intermediaries, and high counterparty risks, while tokenized assets and stablecoins offer on-chain solutions. From 2025 to 2026, as relevant regulations gradually matured, institutional deployment of on-chain businesses formally gained the conditions for implementation.
Various stablecoins, tokenized funds, commodities, and on-chain equities are issued and settled on Ethereum, with Layer 2 networks diverting transactions before ultimately returning to Layer 1 for final settlement, through which ETH continuously accumulates value. By market capitalization, Ethereum remains the world's largest platform for carrying tokenized assets, operated jointly by the Ethereum Foundation and the developer community. Teams like Etherealize specialize in connecting with traditional financial institutions, promoting the entry of institutional capital. In Q1 2026, the Ethereum ecosystem exhibited a polarized trend. The following analysis provides a detailed breakdown using complete data from Token Terminal.
The market in Q1 2026 presented a distinct two-sided situation: on-chain usage scale reached historical highs—monthly active users, total transaction volume, and throughput all set new records; however, asset valuations and fee metrics denominated in US dollars contracted simultaneously, with fully diluted market capitalization, total value locked, trading volume, and both types of fee data declining quarter-over-quarter. Key events this quarter profoundly shaped this unique market dynamic:
In January, the second round of the Fusaka upgrade cycle, only the Blob Parameter Optimism fork (BPO#2) was implemented, significantly increasing data storage and carrying capacity.
In February, the ERC-8004 standard launched on the mainnet, becoming the universal standard for AI agent identity and credit ratings.
The Ethereum Foundation established three core goals for the 2026 protocol roadmap: scaling, optimizing user experience, and strengthening Layer 1 foundational security.
In March, the Institutional Ethereum Forum was held, with significantly increased participation from traditional financial institutions.
Key Metrics for Ethereum Q1 2026
Total Value Locked (TVL) in the Ecosystem: $316.2 billion (QoQ -11.0%, YoY +22.8%)
Outstanding Active Debt in the Ecosystem: $21.8 billion (QoQ -16.6%, YoY +39.0%)
Total Decentralized Exchange (DEX) Trading Volume in the Ecosystem: $134.5 billion (QoQ -24.0%, YoY -31.2%)
Total Application Fee Revenue across the Ecosystem: $2.0 billion (QoQ -16.9%, YoY -7.8%)
Total Market Capitalization of On-chain Tokenized Assets: $203.4 billion (QoQ -0.7%, YoY +42.9%)
Stablecoins: $178.9 billion (QoQ -2.3%, YoY +37.6%)
Tokenized Funds: $19.4 billion (QoQ +4.9%, YoY +73.1%)
Tokenized Commodities: $4.7 billion (QoQ +60.0%, YoY +325.9%)
Tokenized Stocks: $365.1 million (QoQ +16.5%)
Monthly Active User Addresses: 13.20 million (QoQ +53.5%, YoY +85.9%)
Total Layer 1 Transaction Count: 200.4 million (QoQ +38.0%, YoY +81.5%)
Average Transactions Processed per Second (TPS): 25.78 (QoQ +41.2%, YoY +81.7%)
Total Layer 1 Mainnet Transaction Fee Revenue: $39.90 million (QoQ -47.9%, YoY -81.9%)
ETH Fully Diluted Market Capitalization: $290.0 billion (QoQ -30.3%, YoY -9.9%)
ETH Staking Ratio: 0.31 (both QoQ and YoY increased by 0.03)
Total Number of ETH Holding Addresses: 292.8 million (QoQ +8.1%, YoY +24.9%)
Note: This report's statistical scope covers only the Ethereum Layer 1 mainnet. Layer 2 networks are considered independent blockchains, and their data is not included in Ethereum's statistics.
Overall Ecosystem Development
Total Value Locked (TVL) refers to the total US dollar value of assets deposited into various on-chain applications. It is a leading indicator for revenue-generating activities like lending, trading, and staking. This statistic measures the on-chain, withdrawable funds deposited by users across the entire Ethereum ecosystem. In Q1 2026, the average TVL for the Ethereum ecosystem reached $316.2 billion, down 11.0% quarter-over-quarter but up 22.8% year-over-year. The quarterly decline stemmed from a general price correction in crypto assets, while the significant year-over-year growth demonstrates substantial expansion in ecosystem scale compared to the same period last year.
Among the top five public blockchains, Ethereum's locked value stands far ahead: $316.2 billion significantly surpasses the combined totals of Tron ($84.5B), Solana ($28.8B), BNB Chain ($10.3B), and Plasma ($5.7B), accounting for 71% of the total locked value across these five chains. Funds are primarily concentrated in two major sectors: the liquid staking sector led by Lido, and the lending sector centered around Aave; restaking protocols like EigenLayer and ether.fi, as well as synthetic dollar stablecoin platforms like Ethena and Sky, also hold substantial funds. High concentration of capital remains Ethereum's most prominent structural advantage.
The Active Lending metric represents the scale of user deposits that are lent out and generate interest income, directly reflecting lending business revenue. This statistic measures the total outstanding loan amount across all lending applications on Ethereum. In Q1, the average active lending size in the ecosystem was $21.8 billion, down 16.6% QoQ but up 39.0% YoY. The contraction in lending balances in sync with TVL reflects a cooling of overall market risk appetite, but the scale remains far higher than the same period last year.
Ethereum's lending market is concentrated in a few liquidity pools, with Aave dominating: its outstanding active lending size at quarter-end was approximately $13.5 billion, capturing the vast majority of the ecosystem's share; followed by Morpho (~$1.9B), Spark under Sky (~$1.0B), and Maple (~$0.84B). The contraction in lending size this quarter was primarily driven by Aave, as declining crypto asset prices led to reduced borrowing demand, with its total loan volume shrinking by about 24%. Comparing across the five major chains, Ethereum's $21.8 billion in active lending far exceeds Solana ($2.5B), Plasma ($2.1B), BNB Chain ($0.7608B), and Avalanche ($0.3924B), accounting for 79.2% of the total lending volume across these five chains. This is the sector where Ethereum holds the highest percentage share among the top chains.
Decentralized Exchange (DEX) trading volume refers to the total transaction amount completed on on-chain spot exchanges. Traders pay fees when executing trades, making trading volume highly correlated with platform revenue. This data aggregates trading across all DEXs in the Ethereum ecosystem. In Q1, the ecosystem's total trading volume was $134.5 billion, down 24% QoQ and 31.2% YoY. The decline in trading volume was steeper than the contraction in TVL, confirming a significant reduction in market risk appetite during this quarter's asset downtrend cycle.
Ethereum's DEX trading flow is highly concentrated among top platforms: Uniswap's Q1 trading volume was approximately $85.5 billion, accounting for two-thirds of the ecosystem total; followed by Curve (~$22.1B) and CoW Swap (~$12.4B). Trading volume is the only metric where Ethereum did not top the five major chains: BNB Chain's total trading volume of $162.5 billion exceeded Ethereum's $134.5 billion, with Solana following closely ($104.9B), and Avalanche ($14.5B) and Polygon ($10.7B) ranking lower. Ethereum's trading volume constituted 31.5% of the combined total of the five chains, second to BNB Chain's 38%.
Ecosystem fees refer to all fees generated by users using various applications, including borrower interest and trader transaction fees. This directly reflects the economic value created by the ecosystem, aggregating total fees from all Ethereum applications. In Q1, total ecosystem fees amounted to $2.0 billion, down 16.9% QoQ and 7.8% YoY, declining in sync with lower trading and lending activity.
Ethereum's $2.0 billion in ecosystem fees far outpaces Tron ($599.3 million), Solana ($532.5 million), BNB Chain ($231.9 million), and Polygon ($38.8 million), accounting for 58.4% of the total fees across the five major chains. Even with this quarter's decline, Ethereum remains the industry's largest source of application fees. Summarizing all indicators in this section: Ethereum leads the industry in total locked value, lending size, and ecosystem fees, with only DEX trading volume falling short of BNB Chain.
Tokenized Assets Sector
Total Market Capitalization of Circulating Assets refers to the total value of on-chain tokenized assets, calculated as the circulating supply multiplied by the daily closing price. For stablecoins, it's the total circulating issuance; for tokenized funds, it's the on-chain asset under management; for tokenized stocks, it's the total value of on-chain issued shares. This section only counts assets issued on Ethereum.
In Q1, the average total market capitalization of tokenized assets on Ethereum was $203.4 billion, essentially flat QoQ (down only 0.7%) but up a significant 42.9% YoY. Stablecoins account for 87.9% of the total size, with the remaining share split among tokenized funds, commodities, and stocks.
Stablecoins
The average stablecoin size on Ethereum in Q1 was $178.9 billion, down slightly by 2.3% QoQ but up 37.6% YoY. It was the only tokenized sub-category to see a quarterly contraction. The market is dominated by two major issuers: at quarter-end, Tether's USDT ($94.1B) and Circle's USDC ($54.5B) together accounted for the vast majority of Ethereum's stablecoin market cap; other leading products include Sky USDS ($12.4B), Ethena USDe ($5.9B), and PayPal PYUSD ($2.9B); new compliant tokens like Ripple's RLUSD ($1.1B) have also launched. Comparing across the five major chains, Ethereum's $178.9 billion stablecoin scale leads Tron ($84.5B), Solana ($14.5B), Arbitrum One ($6.8B), and Base ($4.7B), accounting for 61.8% of the total stablecoin value across these five chains.
Tokenized Funds
The average size of tokenized funds on Ethereum in Q1 was $19.4 billion, up 4.9% QoQ and surging 73.1% YoY. The sector is divided into two main types:
Yield-bearing on-chain USD products (largest by size): Sky sUSDS (~$6.4B), Ethena sUSDe (~$3.5B);
Traditional financial compliant funds (core vehicles for the institutional narrative): BlackRock BUIDL (issued via Securitize, ~$1.0B), WisdomTree Government Money Fund (~$0.815B), Superstate USTB (~$0.62B), with Ondo OUSG (~$0.32B) following closely. Comparing the five major chains, Ethereum's $19.4 billion in tokenized funds significantly leads ZKsync Era ($2.5B), BNB Chain ($2.3B), Solana ($1.3B), and Stellar ($1.1B), accounting for 73% of the total. This is the second most dominant tokenized asset sector for Ethereum.
Tokenized Commodities
The average size of tokenized commodities on Ethereum in Q1 was $4.7 billion, up 60% QoQ and surging 325.9% YoY, making it the fastest-growing tokenized category. The sector consists almost entirely of on-chain gold: Tether Gold XAUT (~$2.6B) and Paxos Gold PAXG (~$2.4B) together account for the entire sector share. Comparing across the five relevant chains, Ethereum's $4.7 billion scale far exceeds Ripple ($736.6M), Arbitrum One ($95.9M), BNB Chain ($38.4M), and Solana ($29.8M), accounting for 84% of the total. This is the tokenized sub-sector where Ethereum exerts the strongest dominance.
Tokenized Stocks
Tokenized stocks are the smallest sub-category. The average size on Ethereum in Q1 was $365.1 million, virtually zero a year ago, and up 16.5% QoQ. The sector is almost exclusively dominated by Ondo Finance, which issues on-chain assets for broad-based indices like the S&P 500 and Nasdaq 100, as well as dozens of individual stocks, constituting the vast majority of Ethereum's tokenized stock market cap. Comparing across the five major chains, Ethereum's $365.1M slightly leads Solana ($249.0M), BNB Chain ($150.5M), Arbitrum One ($29.0M), and Stellar ($4.2M), accounting for only 45.8% of the total tokenized stock value across these five chains. This is the only tokenized asset sector where Ethereum does not hold an absolute majority share.
Summary of the Tokenized Assets Sector: Stablecoin stockpiles saw a slight decline in Q1, but Ethereum's dominant position in tokenized funds and commodities continues to solidify.
On-chain Usage Activity
Monthly Active Users are defined as unique addresses that generate revenue-generating on-chain transactions each month. This metric only counts addresses interacting with the Ethereum Layer 1 mainnet. The average monthly active users in Q1 were 13.20 million, surging 53.5% QoQ and up 85.9% YoY, setting a new historical record and ending the slow growth trend of previous quarters, with user growth accelerating significantly.
Total Transaction Count refers to the number of transactions written to the blockchain and confirmed, reflecting user on-chain interaction intensity. Transactions Processed per Second (TPS) is the average confirmation rate within the period, measuring the network's real-time carrying capacity. Both metrics are counted for the Ethereum Layer 1 mainnet only. In Q1, Layer 1 total transactions reached 200.4 million, up 38% QoQ and 81.5% YoY; average TPS increased to 25.78, up 41.2% QoQ. Both figures set new historical highs, proving that user growth has translated into real on-chain business volume increases.
Fees here specifically refer to the base network costs users pay for initiating transactions on Ethereum Layer 1, distinguished from the total ecosystem application fees in Part 2. In Q1, total Layer 1 transaction fees were $39.90 million, plummeting 47.9% QoQ and dropping sharply 81.9% YoY. The core data contrast this quarter is rising activity alongside sharply declining fees: while transaction volume increased 38%, total fees contracted by nearly half. The core reason is that Blob scaling significantly increased block storage capacity, ensuring ample block space supply and substantially reducing the cost per transaction.
The core conclusion of this section is that scaling benefits have materialized: users and transaction counts have simultaneously reached new highs, while overall network usage costs have declined. When network throughput expansion outpaces the growth rate of market transaction demand, the characteristic "activity up, fees down" emerges.
Native Token ETH Fundamentals
Fully Diluted Market Capitalization calculation logic: ETH token price × the total potential supply under the current token economic model (including circulating, locked, unlocked, and yet-to-be-issued tokens). In Q1, ETH's average fully diluted market cap was $290.0 billion, down sharply 30.3% QoQ and 9.9% YoY. This is the indicator with the largest quarterly decline among all valuation metrics in the report and the core factor driving the contraction in the dollar-denominated asset scale across the entire ecosystem.
Staking Ratio: The ratio of the total value of ETH staked to secure the Proof-of-Stake network to the overall market capitalization of ETH; 0.31 indicates approximately 31% of ETH's market value is participating in staking. The average staking ratio in Q1 was 0.31, higher than the 0.28 from the previous quarter and the same period last year. Even as ETH's overall market cap significantly corrected, the proportion of tokens participating in network security staking continued to rise, indicating stable long-term staking意愿 among users during the price downtrend cycle.
Token Holder Metric: The total number of unique wallet addresses holding ETH. The average number of ETH holding addresses in Q1 was 292.8 million, up 8.1% QoQ and 24.9% YoY, marking five consecutive quarters of steady growth. Against the backdrop of a continuously declining fully diluted market cap, the expansion of holding addresses signifies further dispersion of the ETH-holding群体, with ordinary users'布局意愿 not cooling with short-term market trends.
Etherealize Team Commentary
The most core contradictory phenomenon this quarter: Ethereum Layer 1 mainnet on-chain usage scale hit historical highs, while network transaction fees simultaneously declined. Ethereum actively推进 network scaling, sacrificing short-term fee revenue for the long-term logic: cheaper block space will unleash massive potential market demand, ultimately driving long-term全网 revenue growth.
Data from Token Terminal's "Ethereum Report Q1 2026" proves this long-term logic正在兑现: on a year-over-year basis, monthly active users grew 85.9%, total transaction volume increased 81.5%, and network throughput rose 81.7%. This is a classic manifestation of Jevons Paradox. The team predicts that the long-term increase in全网 transaction demand will completely offset the short-term revenue loss caused by the decline in per-transaction fees. Drawing an analogy to the semiconductor industry: when Gordon Moore proposed Moore's Law in 1975, industry revenue规模 was limited; today, industry revenue has grown by several orders of magnitude. Scaling红利尚未完全释放: the planned Glamsterdam upgrade in Q3 aims to increase the Gas limit more than threefold; according to Ethereum's long-term roadmap规划, by 2029, it aims to achieve tens of thousands of TPS, creating a high-speed Layer 1 blockchain with second-level transaction finality.
The team agrees with BlackRock CEO Larry Fink's观点 from last December: the current stage of the tokenization industry is equivalent to the internet in 1996—when Amazon's online book sales were only $16 million. At the time, the market普遍 believed Amazon was merely an online bookstore surviving on the internet bubble and持续亏损; but Jeff Bezos预判 that the internet would彻底重塑 the retail industry,放弃短期盈利 to全力打造 network effects and scale advantages. Ethereum is now making the same取舍 to巩固 its position as the global financial底层 settlement layer.
Internet development offers another crucial启示: open, permissionless networks最终一定会战胜封闭私有 networks. In 1995, Bill Gates predicted in "The Road Ahead" that digital commerce would rely on enterprise proprietary private networks, "information highways," rather than the open internet. At the time, Microsoft created MSN, and America Online, CompuServe, Prodigy all operated封闭围墙花园, boasting millions of paying users; France's Minitel terminal system still had more users globally than the entire internet until late 1996. Yet all these封闭 systems ultimately failed. No正规大型 enterprise is willing to build its business on a network controlled by a competitor; more importantly, no single company can permanently keep up with the pace of innovation in a permissionless open ecosystem. History repeatedly confirms this规律: Linux surpassed proprietary Unix systems, the open web replaced enterprise封闭 intranets, Wikipedia replaced Encyclopædia Britannica. At the beginning of each transition, proprietary products gain first-mover advantages凭借更精准的功能,充足营销, and商务资源; but when the open ecosystem accumulates sufficient development tools, developers, and neutral, trustworthy attributes, first-mover advantages rapidly dissipate.
Now this industry规律 is replaying in financial infrastructure领域. All data in this report can佐证 that Ethereum has crossed the ecosystem critical mass threshold:它 holds绝对 market share in all core sectors. Institutions choosing Ethereum for deploying tokenized finance is not due to理念偏好, but because生态流动性, composability, and成熟机构落地案例 are already concentrated here. Report data shows: Ethereum holds 79.2% of DeFi active lending, 61.8% of stablecoins, 73% of tokenized funds, and 84% of tokenized commodities market share across the five major chains. Each new type of tokenized asset further thickens生态流动性,持续吸引更多机构入场; a neutral, non-biased底层 is the industry's only stable equilibrium solution—large financial institutions will绝不会统一选择竞品私有链 for asset settlement. Moreover, institutions are gradually realizing that private interactions, access restrictions, KYC compliance, and asset transfer controls can all be implemented through privacy computing environments and permissioned token standards on top of Ethereum, while fully tapping into the全网公共流动性. Conversely,封闭私有链 cannot嫁接 the massive liquidity and diverse applications of an open ecosystem.
After the quarter ended, institutional deployment accelerated further. In May alone, several significant implementations emerged: In asset management: BlackRock filed for two new tokenized funds; JPMorgan Chase issued its second on-chain货币基金 JLTXX on Ethereum; Fidelity International launched the Moody's AAA-rated dollar liquidity fund FILQ,上线 as an ERC-20 token. In the stablecoin sector: The Japanese Blockchain Foundation's yen stablecoin EJPY is即将部署 on Ethereum; a European alliance of 12 major banks (including BNP Paribas, ING, UniCredit, BBVA, etc.) is preparing a compliant euro stablecoin.
In 1990, the internet seemed遥不可及; by 2005, it had become a societal刚需. If Fink's assessment of the tokenization industry's development stage is accurate, the next few years may be the most opportune phase in Ethereum's development history. The team's previous "Efficient Money" report proposed the core观点: network fees构建 ETH's intrinsic value floor; the long-term optimistic logic is that依托更完善的货币属性, ETH有望吸纳 the combined超 $30 trillion monetary贮藏 value溢价 of gold and Bitcoin. Ethereum can establish industry leadership without relying on high fees.
