Glassnode: two times more Ethereum (ETH) in DeFi than on exchanges

Sun 16 May 2021 ▪ 18h57 ▪ 3 min read — by Maximilien Desbordes

In this article, we put on our statistics hats for a moment. Recent data shows that there is more ether (ETH) in DeFi than on cryptocurrency exchanges.

Ether (ETH) in every nook and cranny

On 6th May 2021, Glassnode tweeted a graph comparing the number of ether deposited in Ethereum-based smart contacts to the number of ether held on CEX over the last 17 months.

Since the start of 2020, the proportion of the total ether supply represented by the centralised exchanges fell from close to 17% to 12%, a drop of more than 25%.

During this period, the percentage of ether stored in smart contracts witnessed a 75% increase, from 13% to 22.8%.

Therefore, it would appear that DeFi is eating away at CEX profits earned from gas fees.

Figures from DeFi Llama demonstrate that around 9% of the total ether supply is stored in smart contracts hosted on networks outside the main Ethereum chain.

DeFi Llama estimates that 8.3 million ether are on the Binance Smart Chain (BSC), representing 7% of the total supply. Meanwhile, 286,153 ether are stored on Solana (SOL), 0.25% of supply, and 103,902 ether are on Avalanche (AVAX), 0.09% of the total supply.

Approximately 1.6% of the cryptocurrency currently in circulation, 2.8 million ether, are held on other networks.

$4,000 after Berlin?

At the time of writing, ether is currently trading at $3,771 (~£2,675). Gas fees have become more manageable since the launch of Berlin in April 2021, even if the full deployment of Eth2 is still some way off.

The relative reduction in gas fees not only helps ether’s market price, it also benefits DeFi and NFT projects based on Ethereum.

There we have it: DeFi is the foundation for Ethereum’s continued growth. The decentralisation of traditional finance is a gargantuan project that is a long way from being finished, but it nonetheless holds strong growth prospects for ether’s price. If Eth2 delivers on its promises, DeFi and NFT initiatives will be able to accelerate their development even faster. Bitcoin (BTC) is undoubtedly the star of the show at the moment, but in the long term, practicality and convenience might just prevail over scarcity.

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Maximilien Desbordes avatar
Maximilien Desbordes

Ayant évoluer dans l'univers du jeu video pendant près de 5 ans, je suis un vrai Geek et c'est tout naturellement que je me suis tourné vers le monde des cryptos.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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