Ethereum solidified its position as the primary settlement layer for large-scale crypto activity in 2025, leading all networks in capital inflows. The network recorded more than $64 billion in total inflows and $4.2 billion in net inflows, surpassing all competing chains. This dominance was heavily reliant on bridge infrastructure connecting major chains back to Ethereum and the superior liquidity of Ethereum-based stablecoins for settlements and exchange operations.
A significant shift occurred after market stress in October, as capital decisively exited higher-risk environments and rotated back to Ethereum's main layer. This trend continued into December, with Ethereum adding roughly $195 million in net inflows during the final week of the year. Lower transaction fees improved accessibility, supporting renewed on-chain activity.
This capital rotation came at the expense of Layer 2 networks, which saw a measurable decline in liquidity toward year-end. Stablecoin balances on L2s dropped by approximately $1 billion in December, reducing their share of the broader Ethereum ecosystem economy to 13.5%. Arbitrum accounted for the largest portion of net outflows as DeFi liquidity consolidated back onto Layer 1. Despite this capital contraction, Layer 2s continued to process more than 93% of transaction volume, highlighting a separation between transaction throughput and capital concentration.
Concurrently, Ethereum's on-chain activity and user base expanded significantly, moving opposite its price performance. The number of active addresses on the network continuously increased, surpassing the 275 million landmark. Market expert Leon Waidmann noted the ETH mainnet recently hit a new all-time high in network activity, processing more transactions and computations than ever before. This growth was driven by an expanding user base across DeFi, staking, NFTs, and Layer 2 activities, with L2s strengthening the network's scalability rather than draining activity from the mainnet.
Despite this fundamental strength, ETH experienced notable price volatility in 2025, ending the year down 12.1% after sharp declines in the final quarter. The asset traded near $2,930, within a yearly range between $1,400 and $4,948. Even under this price pressure, Ethereum attracted sustained whale accumulation and higher DeFi lending activity.
