A Coinshares report found that Ethereum’s (ETH) role in crypto is shaped by two main pillars: marketplaces and stablecoins.

However, while the network is making waves in these areas, the outlook for new applications remains unclear.

Dominance of Decentralized Exchanges

A report published on September 24 found that marketplaces and stablecoins accounted for just over half of Ethereum’s current use cases. Decentralized finance (DeFi) protocols and the booming stablecoin market are key drivers of the trend, highlighting Ethereum’s role as the underlying infrastructure for many crypto projects.

According to the study, marketplaces such as decentralized exchanges (DEXs) and non-fungible token (NFT) platforms have solidified the network’s position as the leading blockchain for tokenized assets.

Uniswap alone accounted for at least 15% of transaction fees generated on Ethereum in the first half of 2024. OpenSea NFT marketplace was also identified as a key source of on-chain fees, though its importance has declined markedly since it peaked at $572 million in the first half of 2022.

Additionally, the study notes that there are currently over $135 billion worth of stablecoins traded on Ethereum, including the two largest by market cap: Tether (USDT) and USD Coin (USDC).

These digital assets use the blockchain structure to maintain a peg to fiat currencies, while adding liquidity to DeFi platforms and making cross-border payments seamless.

Despite these positives, the Coinshares report raises an important question: what comes next?

Analysts believe that recent network upgrades, including the move to Proof-of-Stake (PoS) and the ongoing development of Layer 2 (L2) scaling solutions, have put the network in a good position for future growth. However, future innovation remains speculative, and demand for new decentralized applications (dApps) is uncertain.

CoinShares suggests that Ethereum’s future success may depend on its ability to outperform its current use cases. The network’s potential for enterprise adoption, gaming, and metaverse-related innovation is there, but real demand and implementation are key. Ethereum will need to attract developers to push the boundaries of what blockchain technology can offer in everyday life.

In a summary of the findings published on the site, James Butterfill, head of research at the crypto asset management firm, said that ETH’s value is primarily driven by “Ethereum transaction demand,” or how much users are willing to pay for services on the network, rather than factors like staking yields.

The report also found that most transaction fees on the network are generated through “a very small set of services,” which mostly consist of speculation or simple value transfers. As such, Butterfill said the network needs to focus on creating “sustainable on-chain utility” to ensure its long-term value.