## Ethereum consolidates dominance in the DeFi market: what is DeFi and why the network leads

Ethereum demonstrated a spectacular growth in its Total Value Locked in DeFi (DeFi, or Decentralized Finance), surpassing any other competing network by an impressive margin. With TVL exceeding **$99 billion**, the network expanded its lead to approximately 9 times that of its closest competitor, reaffirming its position as the core infrastructure for the decentralized digital economy.

### What is DeFi and why Ethereum dominates

DeFi refers to the set of financial applications built on blockchains that operate without traditional intermediaries. While networks like Solana and BNB Chain focused on transaction speed and retail volume, Ethereum chose to establish itself as a global settlement chamber for institutional capital.

This strategy proved to be successful: with approximately **68% of the total DeFi market**, Ethereum attracts institutional investors who prioritize deep liquidity and security. Its robust order books can absorb large volumes without causing significant price slippage, an essential feature for institutional capital that demands stability.

### Hub-and-spoke architecture validates scalability

The validation of the hub-and-spoke model in 2025 dismantled the theory that layer 2 solutions (L2) – Arbitrum, Optimism, and Base – would fragment liquidity. In practice, Ethereum outsourced high-frequency retail operations to its L2s, maintaining security and purpose on layer 1 (L1).

This functional separation generated dual benefits: users enjoy reduced fees on L2s, while the main network preserves its dominance in total value locked.

### Technical upgrades and privacy drive the network

The Pectra upgrade transformed smart wallets into a global standard, while Fusaka further reduced transaction costs. Both improvements solidified Ethereum as the preferred repository for global wealth.

Notably, privacy protocols within the ecosystem grew **more than 60%** in 2025, with over **750 projects** in web3 development dedicated to privacy, DeFi, wallets, and storage.

### Maturity milestones: a decade of continuous operation

Ethereum celebrated **10 years of uninterrupted operation** in July 2025. During this period, it deployed over **88 million smart contracts**, with daily transactions reaching a record high of **2.23 million** in December.

The network supports the largest developer community among blockchains, with **32,000 active programmers** driving continuous innovation. This resilience through market cycles has established a reliability standard in the industry.

Ethereum’s trajectory in 2025 exemplifies how robust infrastructure, intelligent scalability, and unwavering security created the ideal environment for DeFi growth – transforming the network from an emerging platform into the foundation of the digital civilization.