Ethereum is undergoing a significant shift away from retail-centered use toward serving as an institutional settlement hub, according to recent research from Bitwise Europe. Their analysis reveals that stablecoin transactions have now overtaken traditional retail trade flows, becoming the dominant form of activity on Ethereum’s blockchain. Currently, Ethereum hosts over $127 billion worth of stablecoins, underscoring its emerging role as a platform for substantial institutional treasury operations and mainstream financial settlements.
Bitwise’s findings indicate this transition represents a strategic repositioning of Ethereum—from a retail-focused “toll road” to an industrial-scale “freight terminal” catering specifically to larger institutional investors. Meanwhile, traditional retail activities such as decentralized finance (DeFi) and non-fungible tokens (NFTs), which fueled Ethereum’s earlier rapid growth, are increasingly migrating off Ethereum’s layer-one mainnet to various layer-two (L2) scaling solutions.
In particular, NFT market activity that flourished between 2021 and 2022 has substantially diminished on Ethereum’s mainnet. Bitwise notes that while this decline partly reflects broader market cooling, it also corresponds to the widespread movement of NFT projects to more cost-efficient and faster layer-two networks.
Today, Ethereum’s primary blockchain has shifted focus to foundational operations such as handling ETH transfers, managing regulated tokenized financial instruments, and maintaining the complex infrastructure necessary for rollups and cross-chain interoperability. Moreover, planned technical advancements like Pectra, already launched, along with forthcoming protocol improvements including PeerDAS and Fusaka, highlight a strategic intent to optimize Ethereum’s capacity for institutional use even further.
Industry observers anticipated this evolution toward institutionally oriented infrastructure. Notably, in early 2024, Ethereum core developer Eric Conner predicted that Ethereum’s main network would eventually move away from accommodating daily consumer-level token transactions. Instead, Conner noted, the mainnet would increasingly serve institutional settlement needs and provide a secure, decentralized foundation for more transaction-intensive applications hosted on layer-two solutions.
Addressing prevalent concerns over high transaction costs on Ethereum, Conner explained that as the mainnet evolves, everyday transactional activities would migrate entirely to L2 networks, leveraging Ethereum’s robust security and decentralization without incurring prohibitive transaction fees.
Overall, Ethereum’s pivot highlights a clear strategic alignment towards meeting institutional demands, reshaping it from a platform primarily associated with retail-driven use cases to one focused squarely on enterprise and substantial financial settlements.
