Since last year, Ethereum addresses have been growing robustly and steadily, but daily transaction volumes and the number of on-chain whales are declining.
New data reveals that the Ethereum network gained 18.36 million new addresses with balances above zero in 2021. This reflects an impressive monthly growth rate of 1.53 million addresses, yet competition for market share is intensifying.
Blockchain analytics firm IntoTheBlock shared these findings in a February 15 tweet.
Key Trends in Ethereum Adoption
1. Address Growth vs. Price Performance
Despite Ethereum (ETH) hitting two all-time price highs in 2021, new address growth didn’t directly correlate with price surges. The network added roughly 10 million addresses between October and year-end.
2. Declining Active Address Percentage
While total addresses increased, the proportion of active addresses dropped:
- January 1, 2021: 1.05%
- April 25, 2021 (peak): 1.66%
- February 15, 2022: 0.86%
3. Whale Wallet Reduction
The number of wallets holding 1,000+ ETH has decreased since early 2021. According to Glassnode (February 13), whale wallets hit a 4-year low of 6,226.
Transaction Volume and Competing Networks
Daily transactions on Ethereum have plateaued around 1.2 million since mid-December (Ycharts). High gas fees and the rise of faster, cheaper alternatives like:
- Layer 2 solutions (e.g., Optimism, Arbitrum)
- Sidechains (e.g., Polygon)
👉 Why Polygon is attracting Ethereum developers
For instance, Quickswap developer Sameep Singhania cited lower costs as a key reason for building on Polygon.
Polygon’s Rising Dominance
After a usage spike in May 2021, Polygon’s average daily transactions (~3 million) now double Ethereum’s.
Ethereum’s TVL Leadership
Despite challenges, Ethereum remains the top smart-contract platform by Total Value Locked (TVL):
- Ethereum: $124.24 billion (DeFi Llama)
- Terra (LUNA): $15.04 billion
👉 How Ethereum maintains its DeFi dominance
FAQs
Q: Why are active Ethereum addresses declining?
A: High gas fees may be pushing users toward Layer 2 solutions or competing blockchains.
Q: What’s driving Polygon’s growth?
A: Faster transactions and lower fees make it appealing for dApps and users.
Q: Will Ethereum’s TVL lead continue?
A: Yes, but competitors like Solana and Avalanche are gaining traction.
Data sources: IntoTheBlock, Glassnode, Ycharts, DeFi Llama.