Ethereum's Decline Masks Booming DeFi Activity

Ethereum's network activity has seen a significant decline in recent months, but its DeFi protocols are thriving. Daily active addresses on Ethereum fell from over 1.5 million in January to around 544,000 by July, a drop of about 64%. Meanwhile, DeFi protocols like Aave have seen a surge in new wallet creation, with Aave adding 1,806 new wallets on June 30 alone, its highest single-day total since October 2021.

The numbers behind the divergence are stark. New-address creation on Ethereum averaged around 327,000 per day in mid-January, with a peak of nearly 394,000. However, this growth was largely driven by the Fusaka upgrade in late 2025, which reduced transaction fees and made stablecoin transfers significantly cheaper.

Total value locked across Ethereum's DeFi ecosystem remained steady at around $41 billion as of July, showing resilience even as the broader network metrics deteriorated. Data from analytics platforms such as Santiment and Dune supports this trend, with wallet growth in DeFi-specific protocols outpacing the broader Ethereum trend.

The Fusaka upgrade played a supporting role in the growth of lending protocols like Aave. By reducing gas fees substantially, it lowered the barrier to entry for DeFi participation. Stablecoin transfers became cheaper, which matters greatly for lending protocols where stablecoin deposits form a large share of available liquidity.