Ethereum’s Liquidity Debate: ETH’s Resilience and Risks

Blockworks analyst Jake Koch-Gallup argues that Ethereum’s competitive position is not defined by network revenue alone. Investors also value ETH as a reserve and collateral asset, while Ethereum’s deep liquidity may remain important even as tokenised US stock trading volumes are low. Robinhood Chain and Base are Ethereum layer-2 networks, and Ethena’s expansion to other chains may broaden distribution rather than signal an exit. Ethereum still hosts 56% of USDe, down from 88%. Ethereum retains about 65% of DeFi total value locked, 45% of on-chain real-world asset value and 51% of stablecoin supply. Around 13% of ETH supply is held by spot ETFs and treasury firms, while 36% is staked. Koch-Gallup also cites the network’s developer base, reliability and more than a decade without a network-wide outage. Layer-2 growth could eventually support Ethereum through data fees, although September figures showed Base paid Ethereum about $15,000 in data fees, compared with $711,000 to Optimism Collective. Meanwhile, Plasma’s stablecoin supply nearly doubled from July to $1.41 billion, but remained below its $5.2 billion launch peak. The case for ETH therefore combines strong ecosystem metrics with ongoing questions about value capture and the monetary premium in its valuation.