How is Ethereum blockchain used today?

How is Ethereum blockchain used today?

A look into the crypto activity on the main web3 blockchain, analyzing the main trends it has hosted: ICOs, DeFi, stablecoins, and NFTs.

The launch of Ethereum in 2015 marked the new era of blockchain as a smart contract platform – a universal base created to host all kinds of decentralized endeavors.

In only 8 years of its existence, Ethereum witnessed the rise of ICOs, DeFi, stablecoins, and NFTs, each trend surging at one moment, and receding afterward to their respective base levels. Understanding Ethereum’s valuation, as well as the overall web3 picture, starts with observing what its blockchain is being used for.

On-chain analytics does just that, and Glassnode has recently calculated the relative Ethereum gas usage by transaction type, producing a very interesting graph showing how major trends evolved over time.

From ICOs in the early days of the crypto industry to the slowly cooling NFT trend today, let’s look at the evolution of activity on Ethereum.

ICOs and fungible tokens

ICO stands for Initial Coin Offering, and this abbreviation has signed the crypto industry’s first big hype. A decentralized alternative to the IPOs (Initial Public Offering, the procedure used by companies to raise funds by going public), the ICOs showed how easy it was to raise funds in the borderless crypto space.

They also showed how gullible people can be, with a big number of fraudulent ICO flourishing alongside the legitimate ones. The ICO scams were the first alarm that forced the regulators to look into the crypto sector and declare (in many jurisdictions) that “security tokens” were likened to traditional securities, with all the related formalities.

The ICOs’ hype subsided with the 2018 bear market, but the phenomenon did not go anywhere, with 7-8% of the total gas consumption still related to the fungible tokens today. These are tokens issued by both traditional companies and crypto communities (memecoins like Shiba Inu are just one example).


Stablecoins are tokens that are supposed to always trade at a stable rate, often representing $1, or €1. They are issued by companies that usually hold the equivalent of stablecoins in fiat money, guaranteeing immediate conversion between the two.

The USD-pegged stablecoins experienced a surge in user demand by 2020, as people saw it as a convenient method for payments in the crypto world. The stablecoins utility has somehow shifted since then, now predominantly used for trading cryptoassets (eliminating the need to pass by fiat, which is taxed in many jurisdictions), and hedging.

Stablecoin-related transactions now represent 5-8% of the total network gas consumption, and Tether ($USDT) is the biggest one by far with $83 billion market cap.

Tether could grow so much by eating at the market share of its closest competitor Circle ($USDC), which has the misfortune of being incorporated in the United States and forced to comply with its increasingly crypto-hostile regulations. $USDC market cap has shrunk from $56 billion to $29 billion over the past year.


Decentralized Finance comprises mostly decentralized exchanges (DEX), lending-borrowing, and yield optimization protocols. It reached the peak of its popularity during the second half 2020 – just before the bull run – at one moment consuming over 34% of the network’s gas.

The consumption spiked once again at the end of 2022, when Ethereum switched to the PoS consensus and liquid staking merged as another DeFi sector. Today, out of 22.3 million ETH staked on the blockchain, 32% is staked via a DeFi protocol Lido.

The FTX scandal has ignited mistrust in centralized exchanges, and the leading DEX Uniswap is now consistently exceeding Coinbase in trading volume.

Overall, however, the Total Volume Locked in the DeFi is a fraction of what is was at its peak: $80 billion today from the peak of $258 billion.

Also, the aggregated market cap of the 8 biggest DeFi tokens is still falling. The tokens of Uniswap ($UNI), Aave ($AAVE), Maker ($MKR), Curve ($CRV), Synthetix ($SNX), Compound ($COMP), Balancer ($BAL), and Sushiswap ($SUSHI) mostly give the right to participate in these protocols’ governance and facilitate their services. Their total market cap has declined from the peak of $45 billion to below $8 billion.

However, this graph does not take into account the tokens of the liquid staking protocols, which, on the contrary, have exploded from $500 million to $3.2 billion since the beginning of the year.


The NFTs have existed for many years, but their impressive surge was propelled by the Bored Apes Yacht Club and several other remarkable collections released in the spring 2021.

Their hype also stimulated the use of NFTs for an array of other purposes: certification, fundraising, ticketing… Web3 gaming (which used both fungible tokens and NFTs) has also gained momentum then.

The NFT hype lasted for a year, but for the past several month the new NFT marketplace and aggregator Blur is trying to revive it, via airdrops and the new functionalities it offers.

However, Glassnode’s data shows that the latest interest in NFTs appears to primarily cater to the existing users, indicating that the sector needs to evolve to gain a wider adoption.

Ethereum transaction activity is an excellent gauge of the current trends in the crypto world. We can see the emergence of new tools and the advent of new use cases, first fuelling the hype, then reaching a level of stability aligned with their real use.

Technology often evolves in leaps and bounds, and as we may be reaching the end of the last big leap – the NFTs – and we are extremely curious about what’s next.