JPMorgan analyst Nikolaos Panigirtzoglou called Ethereum’s network activity levels since its Shanghai upgrade “disappointing.” Shanghai enabled withdrawals for Ethereum’s proof-of-stake validators. It activated on April 12 this year.
Since that upgrade, Ethereum’s market capitalization, daily transactions, daily active addresses, and DeFi total value locked (TVL) have all declined.
To be precise, the market capitalization of Ethereum has declined 17% from $230 billion when Shanghai activated to $190 billion today, while daily transactions have dropped 14% from 1 million at activation to 860,000.
Daily active wallet addresses on the Ethereum network also fell 19% from 438,000 to 351,000 while Ethereum’s total value locked (TVL) — a popular metric of the amount of money committed to so-called decentralized finance (DeFi) applications on a blockchain — declined 30% from $30 billion to $21 billion today.
Ethereum-based NFTs have continued to fade in popularity. Tens of thousands of such collections now have lost 100% of their value, with a floor price of $0.
Ethereum DEX volumes have declined 70% from $1.5 billion from Shanghai activation day to $446 million today.
Roll-ups are a silver lining since Ethereum Shanghai
Despite these disappointments, there were a few areas of Ethereum’s ecosystem that grew. Three major roll-ups launched this year — Arbitrum, Optimism, and Base — which attracted activity onto Ethereum Layer 2s.
- Daily active validators have increased 46% from 561,000 in April to 818,000 today.
- Staked ETH (staking ETH is required to activate a new validator) has grown 44% from 18 million in April to 26 million today.
JPMorgan analysts were disappointed in Ethereum’s performance since the Shanghai upgrade. Most investors agree, apparently, given Ethereum’s loss of market capitalization.
Note: Figures rounded throughout to the nearest whole figure for readability.