Ether 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 May 7, 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.
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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 centralized exchanges’ profits from Ethereum trading fees.
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 is locked in Binance Smart Chain protocols, while 286,153 Ether or 0.25% of supply is on Solana, and 103,902 ETH 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, with Ether futures volumes briefly outpacing the BTC markets this week.
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