Cryptocurrency research platform Messari, in a new report, assessed the performance of Ethereum [ETH] in Q3 2022. Titled “State of Ethereum Q3 2022,” Messari found that the blockchain witnessed an uptick in activity on the network in Q3 over the last quarter. However, the network also logged some sectoral declines and suffered a general drop in revenue due to the activities of Layer 2 scaling solutions.
In that case did ETH witness some actual growth?
Network performance
According to Messari, the average daily transactions over the quarter reached a total of 1.2 million. This was a 6% increment from Q2 of 2022. The uptick in daily transactions was seen in ETH transfers and DeFi transactions, which according to the report, grew by 7% and 14%, respectively, over the quarter.
Furthermore, growth in average daily transactions culminated in increased active addresses on Ethereum over the quarter. The network saw 550,000 daily active addresses, representing a 5% growth from the previous quarter.
According to Messari, the general rally in active addresses on Ethereum resulted from the surge in active addresses on 27 July. This was also when Chandler Guo announced plans for an Ethereum PoW fork and some “maintenance activity” from Binance.
Source: Messari
Over the quarter, Messari found that ETH supply grew by 0.7% or 4.2% annualized. Messari further found that since the official target block difficulty for the merge was set in July, ETH call volume rallied steadily across exchanges.
Additionally, the ratio of calls to puts also went up. According to the report:
“The ratio of calls to puts also increased. The strike prices for these calls was largest at the $5,000 level for the September 30 expiry and $2,500 for the December 30 expiry. ETH hovered around $1,500 for the last few months when these bets would have been placed.”
Source: Messari
Here comes the decline
While ETH in smart contracts has been on an uptrend since 2020, the collapse of Terra in May halted this growth, Messari reported. As of 9 May, when Terra collapsed, the total percentage of ETH in smart contracts peaked at 30%. According to Messari, since the collapse of Terra, ETH in smart contracts declined.
Furthermore, due to the uptick in the activities of L2s over the quarter, the network saw a decline in revenue. As a result, total fees on the chain dropped to the lowest level since 2020. According to Messari, a continued decline in fees on the network will “directly impact the staking yields in a post-Merge world.”
Further, while ETH transfers and DeFi daily transactions saw growth over the quarter, daily NFT and bridge transactions on the chain fell by 17% and 41%, respectively.
Source: Messari
Ethereum logged a daily average of 181,000 NFT transactions per day over the quarter and 9,000 bridge transactions within the same period.
Source: Messari
With the Merge out of its way, Ethereum developers are focused on building up the network for more widespread adoption. Up next for the network is the Shanghai upgrade, where pre-merge-staked ETH will be available for withdrawal, and multiple improvements are expected on the network.
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