According to a report published by Bankless, Ethereum’s [ETH] network revenue fell by an astounding 86% in the third quarter of 2022. (an informative site focused on crypto).
Reportedly, Ethereum recorded $1.96 billion in net revenue in the second quarter (Q2). Unfortunately, the third quarter was a paltry $274.12 million.
Since this was the case, the Merge, which took place on 15 September, was not vital to revive the ETH network. As per the status of the network revenue, Q3 had less ETH demand, with the altcoin king staying bearish for most of its sessions.
Nonetheless, there were a few upticks recorded in the quarter.
According to Bankless, ETH active addresses picked up a 3.09% increase from the previous quarter. This led the number of unique wallet addresses to hit 506,384.
Additionally, other positives accompanied the quarter. A notable one was the exceptional surge in ETH staking. Bankless related the report to Nansen data, which showed that the deposit contract surged 80% to 14.1 million. Of these 14.1 million, there were 442,00 unique validators and 84,600 unique depositors.
Interestingly, much of this staking increment could be attributed to Lido Finance [LDO]. Besides offering a liquidity pool for ETH participants, LDO was one of the best-performing cryptocurrencies of the quarter, especially before the Merge. The Lido protocol accounted for 4.25 million out of the depositors.
Another aspect where Ethereum thrived was the Layer-Two (L2) ecosystem. The report stated that the Total Value Locked (TVL) of L2 protocols increased tremendously from 2.40 billion to 4.73 billion.
This value represented a 97% increase from the second quarter. This may not be surprising as protocols like Arbtirum and Optimism seem to have significantly excelled. Interestingly, these two protocols constituted about 81% of the TVL increase.
Still not a goldmine
On the other hand, the DeFi TVL did not follow the steps of the L2 ecosystem.
According to DeFi Llama, the TVL decreased by over 50% to $31.83 billion in the quarter. This was equivalent to 23.55 ETH. As such, the ecosystem had more liquidity outflows than liquid additions.
Dune analytics also showed that the DEX volume decreased from $281.68 billion to $192.73 billion. This decline can, however, be linked to the underperforming market condition.
On the NFT market part, it was a disastrous fall from $8.32 billion to $2.08 billion. There were also declines across the money outstanding debt and increases with stablecoin circulating supply.
In conclusion, the report showed that Ethereum was still plagued with some dark sides despite some positives in other areas.
However, there were indications that the ETH network growth might return to impressive levels especially with more development coming.
Still, the Proof-of-Stake (PoS) blockchain may need to fight off regulatory oversight since it caught the SEC’s attention after the merge.