Ethereum recorded a surge in network activity in the first quarter of 2026, even as its market value, fees, and broader dollar-denominated metrics declined, highlighting a growing gap between usage and price performance.
Monthly active users climbed 53.5% from the prior quarter to 13.2 million, while total transactions rose 38% to 200.4 million. At the same time, mainnet fees fell sharply by 47.9% to $39.9 million, reflecting lower transaction costs following the “Blob” scaling update despite increased on-chain activity.
network growth outpaces monetary metrics
Ethereum’s total value locked stood at $316.2 billion, down 11% quarter-on-quarter but up 22.8% year-on-year. The network retained a dominant 71% share of value locked among the five largest blockchains, exceeding the combined total of Tron, Solana, BNB Chain, and Plasma.
Lending activity slowed, with outstanding borrowing dropping 16.6% from the previous quarter to $21.8 billion, though it remained 39% higher than a year earlier. Decentralized exchange volume declined 24% to $134.5 billion, while total ecosystem fees fell 16.9% to $2 billion. Even so, Ethereum generated 58.4% of fees across leading blockchains, maintaining leadership in most categories except decentralized exchange turnover, where BNB Chain narrowly led.
tokenization remains a core strength
The market capitalization of tokenized assets on Ethereum averaged $203.4 billion, largely unchanged from the previous quarter but up 42.9% year-on-year. Stablecoins accounted for $178.9 billion, down 2.3% from the prior quarter.
Growth was stronger in other segments. Tokenized funds rose 4.9% to $19.4 billion, while tokenized commodities surged 60% to $4.7 billion, driven mainly by gold-backed assets. Tokenized equities reached $365 million, increasing 16.5% from the previous quarter and expanding rapidly from near-zero levels a year ago.
Ethereum continued to dominate tokenization markets, holding 61.8% of stablecoins, 73% of tokenized funds, and 84% of tokenized commodities among the top five chains. It also accounted for 79.2% of DeFi borrowing. Adoption by financial institutions accelerated, with asset managers and banks launching or preparing tokenized funds and euro-based stablecoins.
fundamentals show broader distribution despite price decline
Ethereum’s fully diluted market capitalization fell 30.3% quarter-on-quarter to $290 billion. At the same time, the staking ratio increased to 0.31 from 0.28, and the number of addresses holding ETH rose 8.1% to 292.8 million, indicating wider distribution even as valuation declined.
Network upgrades, including the Fusaka expansion and the ERC‑8004 identity standard, supported higher throughput, with average transactions per second rising 41.2% to 25.78. The Ethereum Foundation identified scaling, user experience, and base-layer security as its primary technical priorities for 2026.
price weakness continues into the second quarter
The divergence between rising usage and falling valuation has continued into the second quarter. Ethereum is on track for a third consecutive quarterly decline, having already fallen 18.39% in the current period after losses exceeding 28% in each of the previous two quarters.
The asset’s price recently dropped below $1,800 and is testing support between $1,700 and $1,750. A sustained break below this range could lead to a move toward $1,500. As of June 20, Ethereum traded near $1,705, with technical indicators pointing to a persistent bearish trend driven by macroeconomic uncertainty, regulatory concerns, and weaker participation.
on-chain activity remains strong despite market pressure
Despite falling prices, network usage has continued to expand. Daily transactions reached a record 3.6 million, supported by around 600,000 active wallets, underscoring continued growth in utility.
Tokenization of real-world assets has been a key driver, with more than 1,058 such assets on the network and nearly 200,000 holders. However, institutional demand has been mixed, with spot ETF products recording net outflows.
Concerns have also emerged around a potential long-term funding gap for core development, which could slow future scaling efforts. In addition, the planned “Glamsterdam” upgrade has been delayed to the third quarter, adding to uncertainty.
Market behavior among large holders has shifted. Early June saw accumulation, with 475,000 ETH withdrawn from major exchanges over a three-day period. More recently, large transaction activity has dropped by more than 86%, indicating that major traders are waiting for clearer market direction.
Ethereum ends the period maintaining leadership in network scale, total value locked, and tokenization, but with a clear disconnect between growing adoption and declining market performance.
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