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On-Chain Data Shows Ether Dominance Outpacing Other Altcoins In The Market: Here’s Why

  • Ethereum strengthened its altcoin dominance as its market share moved slightly above 40% of the market capitalization. 
  • Decentralized applications on Ethereum play a huge role in the network’s dominance, with its TVL miles ahead of its competitors.
  • Observers back Ethereum to maintain its huge lead despite the growth of other networks over the past two years. 

Ethereum (ETH) remains the king of decentralized finance (DeFi) and looks set to increase its dominance as most altcoins fight a potential “securities” tag by the Securities and Exchange Commission (SEC).

Ethereum’s dominance among altcoins has grown in recent years using several metrics. The market share of ETH was 18% trailing only Bitcoin (BTC) in 2020 but has increased to 20% this year amid strong competition. Among altcoins, ETH is top with a market share of 40.6% leaving its closed rival BNB at 7.2%.

The network has remained the leader in decentralized applications and smart contracts attracting big-name developers and startups since its inception. In terms of total value locked, Ethereum has a TVL of $24.6 billion while being followed by Tron and BNB chain with $5.4 billion and $3.3 billion respectively. ETH dominates the TVL market share with a whopping 58%.

A major reason for Ethereum’s dominance is the non-fungible token (NFT) market. Despite pressure from Solana and Polygon, Ethereum continues to outclass its competitors. Solana and other networks boast of cheaper gas fees to mint NFTs and have gained a considerable market share in recent months but the sale volume on Ethereum puts it at an advantage. According to data from CryptoSlam, NFT sales on Ethereum hit $380 million in the last 30 days while Polygon, BNB, and Solana pulled a cumulative sale of $93 million.

Developers pick Ethereum before others

Aside from NFTs, Ethereum has the most developers among others leading to stronger and widely accepted technology. The number of active developers on Ethereum stands above 1,870, while competitors like Polkadot, Cosmos, and Solana have 752, 511, and 383, respectively.

Ethereum has also been hailed as being more decentralized than other networks although it faced criticism after centralized exchanges dominated staking on the network due to the high threshold. The blockchain now has over 700,000 validators with Lido and Coinbase controlling 32% and 9.6% respectively.

The derivatives market remains key for Ethereum’s growth with institutional investors more attracted to the asset than its rivals. ETH cash-settled futures was added to the Chicago Mercantile Exchange, a feat only Bitcoin has attained. ETH futures aggregated interest is above $5.4 billion, while BNB and Solana remain at $380 million and 178 million respectively. Many observers around the community have tips for Ethereum to remain on top of the altcoin market except rivals described as the “Eth killers” make significant network upgrades. 

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