The current state of the Ethereum ETH -2.32% network and its decentralized applications (DApps) as of November 2023 presents a dynamic picture of growth, innovation, and challenges.
Ethereum’s total value locked (TVL) in DApps reached $26 billion on November 23, marking a 5% increase from the previous week. This growth can be attributed to several factors, including the rising price of Ether (ETH), which was trading above $2,000 on November 23.
This uptrend in Ether’s price, by approximately 2.5% over the past week, has been partly driven by improved DApp metrics, increased protocol fees, and Ethereum’s dominance in the non-fungible token (NFT) market.
Ethereum’s market capitalization, at $248 billion, still trails behind Bitcoin’s $728 billion. However, both networks generate comparable protocol revenues. Over the past week, the Bitcoin BTC -2.22% network collected $57.5 million in fees, compared to Ethereum’s $54.3 million. Notably, these figures exclude ecosystem fees from platforms like Lido, Uniswap UNI -2.09%, or Maker protocols.
Ethereum has also regained its leadership position in NFT sales, recording $12.6 million in transactions within 24 hours. Despite a brief period where Bitcoin led in NFT activity, Ethereum remains the preferred blockchain for prominent NFT projects.
A significant factor contributing to Ethereum’s recent price surge, around 25% over the past month, has been the announcement of an Ethereum-based Exchange-Traded Fund (ETF) proposal by BlackRock to the U.S. Securities and Exchange Commission (SEC). This proposal, if accepted, would list the ETF on the Nasdaq stock exchange, further integrating Ethereum into mainstream financial markets.
In terms of network development, Ethereum is preparing for a major update expected to address ‘sharding,’ which will improve the network’s scalability. The network has also integrated ‘EntryPoint,’ an enhancement allowing wallets to function as smart contracts. The upcoming Shanghai upgrade is anticipated to facilitate the unstaking of over $26 billion worth of ETH, highlighting the scale and significance of Ethereum’s ongoing developments.
However, the network faces challenges, such as the recent hack on the Ethereum-based decentralized exchange dYdX. This incident resulted in a $9 million loss from the exchange’s insurance fund to cover gaps in liquidations processed in the recent yearn.finance correction.
Fortunately, no customer funds were affected. The hack was attributed to market manipulation by a well-capitalized bad actor, as suggested by dYdX founder Antonio Juliano. In response, dYdX is widening its margin requirements for more illiquid trading pairs as an immediate measure.