Is Ethereum Losing Its Last Edge?

The episode’s central question is whether Ethereum’s remaining advantages in liquidity, stablecoins, and settlement can offset its loss of trading activity and market share. Carlos sees Bitcoin leading in the near term and wants it to clear $87,000 resistance before a broader rally reaches altcoins; he puts the odds that the market bottom is in at 80%. Jake is more confident Bitcoin bottomed near $58,000, assigning that outcome a 90–95% chance while allowing for a black-swan drop.

Carlos says Ethereum has already lost much of the trading race to Solana and Hyperliquid, and that its advantage in stablecoin and lending liquidity is slowly eroding rather than disappearing in a sudden exodus. Tokenized equities could accelerate that shift: he expects the market eventually to exceed today’s stablecoin market, but sees Base, Solana, Robinhood Chain, and BNB capturing activity that Ethereum is not. He points to Aave’s Coinbase partnership and Base’s equities hub as potential beneficiaries of equity collateral demand, while noting that Ethereum remains Aave’s largest market by a wide margin.

The speakers disagree on what counts as success in tokenized equities. Luke says Ethereum’s tokenized-equity supply exceeds Solana’s, Base’s, and Robinhood’s, though BNB’s is higher and comparisons depend on how liquidity is classified. Carlos argues issuance alone does not prove meaningful use: he estimates that 60–64 wallets hold more than 80% of Ondo’s tokenized-equity supply on Ethereum and found little DeFi use beyond supply associated with Pendle’s USDAT activity. Jake emphasizes access and on-chain holdings even when users do not trade; Carlos prioritizes trading because it drives revenue. He cites about 68,000 tokenized-equity holder positions on Ethereum, 85% worth less than $1 and roughly 1,500 worth more than $10,000.

Ethereum still has substantial liquidity, but the trend is contested. Jake says it holds 48% of stablecoin market capitalization, down from 53% two years ago and 60% three years ago, in a market of about $307 billion. Carlos puts Ethereum stablecoin supply at about $150 billion, down from a peak near $175 billion last year, while several competing chains are near or at record highs; he expects Ethereum’s share to decline gradually, though existing balances may be sticky and about half sit on exchanges. Jake argues that even a 30% Ethereum share of a $3 trillion stablecoin market would mean about $1 trillion on Ethereum. Ethereum also retains 56% of DeFi total value locked, a share that has stayed roughly between 54% and 60% since 2022. Jake says activity on Ethereum-based chains, including Robinhood’s, and Ethereum’s monetary premium should count toward its value; Carlos expects that premium to compress as investment favors revenue-generating applications.

The performance gap is another concern. Ethereum blocks arrive about every 12 seconds; an upgrade now targets 10 seconds next year after an earlier 8-second aim was deferred, while Luke expects the gas limit to reach 200 million in an upgrade this year. Solana latency was cited at about 150 milliseconds. Carlos argues that reducing Ethereum latency from roughly eight seconds to four would not materially improve its trading experience against Solana, Hyperliquid, and Base. He would rather see Ethereum build around liquidity, lending against equity collateral, and settlement, while testing whether it can charge Layer 2 networks more.

Jake says 36% of ETH is staked, an all-time high, despite ETH being down 9% year to date; ETFs and treasury companies account for much of the increase. Staking yield is around 2.5%, against roughly 2% annual supply inflation, and about 15 million ETH is held in liquid staking tokens. Jake says staking reduces the available float and could magnify price moves, but does not create buyers. Participants disputed whether a roughly 2% yield is compelling when price moves can be much larger. EIP 8363, which would remove yield and inflation once 50% of ETH is staked, was removed from the current inclusion process and given a separate six-month published process. One estimate put the 50% threshold around mid-2028 at the current pace. The broader valuation debate remains unresolved: one speaker cited Ethereum’s absence from the DEX-volume leaderboard, a market capitalization of $330 billion, and an FDV-to-revenue multiple near 1,000 times, while arguing that Layer 1 valuations also reflect monetary premiums.