TL;DR
Although decentralized finance activity expanded across multiple blockchains, Ethereum attracted the largest share of returning capital. This behavior reflected a market environment where efficiency and depth outweighed experimentation, especially during periods of volatility.
On-chain data showed Ethereum leading all networks in net value flows over the year. Short-term rotations toward alternative chains occurred, but they did not alter Ethereum’s broader role as the core hub for high-value crypto transfers and DeFi positioning.
Ethereum processed more than $64B in gross inflows and close to $60B in outflows, ranking first in overall ecosystem flows. Its dominance relied heavily on bridge infrastructure that connects most major chains back to Ethereum. Stablecoins amplified this effect, as Ethereum-based tokens remained the most liquid for settlements, collateral management, and exchange operations.
After the market stress observed in October, capital flows shifted decisively. From mid-October onward, liquidity exited higher-risk environments and returned to Ethereum’s main layer. This trend continued into December, with Ethereum adding roughly $195M in net inflows during the final week of the year. Lower transaction fees also improved accessibility, supporting renewed on-chain activity without congestion concerns.
Layer 2 networks saw a measurable decline in liquidity toward year-end. Stablecoin balances dropped by approximately $1B in December, reducing their share of the broader Ethereum ecosystem economy to 13.5%. Arbitrum accounted for the largest portion of net outflows as DeFi liquidity consolidated back onto Layer 1.
Despite this contraction, Layer 2s continued to process more than 93% of transaction volume, underscoring their relevance for scalability. However, only 8.8% of total stablecoin supply remained on these networks, highlighting the separation between transaction throughput and capital concentration.
ETH experienced notable price volatility during 2025, ending the year down 12.1% after sharp declines in the final quarter. The asset traded near $2,930 after briefly moving above $3,000, within a yearly range between $1,400 and $4,948. Even under price pressure, Ethereum attracted sustained whale accumulation and higher DeFi lending activity.
