Ethereum, Solana, and Avalanche See Rising Onchain Activity Despite Falling Token Prices

Despite token prices falling by half or more over the past year, Ethereum (ETH), Solana (SOL), and Avalanche (AVAX) have seen increased onchain activity and reduced transaction costs. According to Bitwise's first quarterly staking report, network fundamentals are diverging from market sentiment.

'We've seen a big divergence between network fundamentals and market sentiment,' said Kam Benbrik, Head of Onchain Research at Bitwise. 'But what we’re seeing onchain is that blockchains are becoming cheaper, and second, onchain activity is actually increasing.'

The decline in revenue was driven mainly by protocol design, as networks made blockspace cheaper and more abundant. Weaker demand played a part in some cases, but it was not the general trend.

A record 40.2 million ETH, representing one-third of the cryptocurrency’s total supply, was staked at the end of the second quarter. Institutional staking of Ethereum has grown significantly, with ETFs, corporate treasuries and other large holders responsible for most of the ETH added to the validator pool this year.