Cryptocurrency research platform Messari, in a the new a reportEvaluating the performance of Ethereum [ETH] in the third quarter of 2022. Titled “The State of Ethereum Q3 2022,” Messari found that the blockchain has seen an increase in activity on the network in the third quarter over the past quarter. However, the network also noticed some sectoral declines and suffered a general decline in revenue due to its Layer 2 expansion solutions activities.
If so, has ETH seen any actual growth?
According to Al-Masari, the average daily transactions during the quarter amounted to 1.2 million. This was an increase of 6% over the second quarter of 2022. The increase in daily transactions was observed in ETH transfers and DeFi transactions, which according to the report grew by 7% and 14% respectively during the quarter.
Additionally, the growth in average daily transactions culminated in an increase in active addresses on Ethereum during the quarter. The network saw 550,000 active addresses per day, which is 5% growth from the previous quarter.
According to Messari, the overall rise in active addresses on Ethereum was a result of the increase in active addresses on July 27. It was also when Chandler Guo announced plans for an Ethereum PoW fork and some “maintenance” activity from Binance.
During the quarter, Messari found that ETH supply grew 0.7% or 4.2% year-over-year. Messari also found that since the official target block difficulty for the merger was identified in July, the volume of ETH calls across exchanges has steadily increased.
In addition, the ratio of calls to sales has also increased. According to the report:
The percentage of calls to sellers also increased. The strike prices for these calls were as high as $5,000 for expiration on September 30 and $2,500 for expiration on December 30. ETH has been hovering around $1,500 for the past few months when these bets were going to be placed.”
Here comes the fall
While ETH in smart contracts has been on an upward trend since 2020, the crash of Terra in May halted that growth, Messari reported. On May 9, when Terra collapsed, the total share of ETH in smart contracts peaked at 30%. According to Messari, since the collapse of Terra, ETH has declined in smart contracts.
Additionally, due to a slight increase in tier 2 activities during the quarter, the network experienced a decline in revenue. As a result, the overall on-chain fee has fallen to the lowest level since 2020. According to Messari, the continued reduction in fees on the network will “directly affect the return on investment in the post-merger world.”
Moreover, while daily ETH transfers and DeFi transactions increased during the quarter, daily on-chain NFT transactions and daily transactions decreased by 17% and 41%, respectively.
Ethereum recorded an average of 181,000 NFT transactions per day during the quarter and 9,000 bridge transactions over the same period.
With the consolidation over, Ethereum developers are focused on building the network for wider use. The next step for the network is the Shanghai upgrade, where ETH with a pre-integration stake will be available for withdrawal, and many improvements to the network are expected.