Almost twice as much ETH locked in DeFi as on exchanges: Glassnode

While the amount of ETH locked in DeFi protocols is up 75% since the start of 2020, the sum of Ether held on centralized exchanges has fallen by 30% over the same period.

Ether (ETH) is being locked up in decentralized finance contracts at an accelerating rate this year, while the amount held on centralized exchanges continues to fall.

On Friday, on-chain analytics provider Glassnode shared a chart comparing the number of Ether deposited in Ethereum-based smart contracts to the number of ETH held on centralized exchanges over the past 17 months.

Since the start of 2020, the share of supply represented by Ether on centralized exchanges has dropped more than a quarter, from roughly 17% to 12%.

Over the same period, the percentage of ETH locked in smart contracts has increased by three-quarters, from 13% to 22.8%, showing that DeFi is steadily eating into the centralized exchanges’ profits from Ethereum trading fees.

Ether supply in smart contracts vs. Ether on centralized exchanges. Source: Glassnode

Figures from crypto data aggregator DeFi Llama suggest that ETH equivalent to roughly 9% of the supply is locked in smart contracts hosted by networks other than the Ethereum mainnet.

DeFi Llama estimates that 8.3 million coins, or 7% of circulating Ether, are locked in Binance Smart Chain protocols, while 286,153 Ether, or 0.25% of the supply, is on Solana, and 103,902 ETH, or 0.09%, is on Avalanche. Roughly 1.6%, or 2.8 million Ether, is locked in other networks.

Ether’s dramatic rally into new all-time highs above $3,500 has renewed discussions of a "flippening" over Bitcoin (BTC), with Ether futures volumes briefly outpacing the BTC markets this week.

Publication date: 
05/07/2021 - 08:24
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