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Ethereum's Q3 2022 Performance: A Mixed Bag Despite The Merge

Ethereum's network revenue plummeted 86% in Q3 2022, despite The Merge. However, active addresses and staking activity saw notable increases, with TVL on L2 protocols rising significantly.
Published on 2022-10-08

Ethereum's Q3 2022 Performance: A Mixed Bag Despite The Merge

Ethereum experienced a challenging third quarter in 2022, with its network revenue dropping by a staggering 86%. This significant decline occurred despite the highly anticipated Merge, which took place on September 15. The Merge, a major upgrade transitioning Ethereum to proof-of-stake, did not immediately revive the network's fortunes.

Network Revenue Plummets

In Q2 2022, Ethereum generated $1.96 billion in revenue, but this figure fell sharply to $274.12 million in Q3. This substantial drop reflects reduced demand for Ethereum during the quarter, with the asset's price largely bearish in its latest session.

Active Addresses and Staking See Growth

Despite the revenue downturn, Ethereum saw a 3.09% increase in active addresses, reaching 506,384. Staking activity also surged, with the deposit contract growing by 80% to 14.1 million depositors. This included 442,000 unique validators and 84,600 unique depositors.

Lido Finance Leads Staking Growth

Lido Finance (LDO) played a significant role in the staking increase, accounting for 4.25 million of the new ETH depositors. LDO's performance was a bright spot, as it offered liquidity pools for ETH participants and was one of the best-performing crypto assets of the quarter.

Total Value Locked (TVL) on L2 Protocols Rises

Ethereum's Total Value Locked (TVL) in Layer-2 (L2) protocols saw a notable increase, rising from $2.40 billion to $4.73 billion. This growth highlights ongoing confidence in Ethereum's scaling solutions, despite the network's overall revenue decline.

Conclusion

Ethereum's Q3 2022 performance was marked by a significant revenue drop, but positive metrics such as increased active addresses, staking activity, and TVL on L2 protocols provided some optimism. The network's post-Merge trajectory remains a critical area of focus for investors and stakeholders.

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