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Institutional adoption of the Ethereum network is gaining momentum despite disappointing Ether price action. Ethereum and its layer-2 account for 65% of TVL’s market share.
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Vitalik Buterin focuses on the scalability of the core layer and ZK-EVM to ensure long-term onchain efficiency and security.
Ether (ETH) is down 36% in 2026, leading to disappointment as the $3,000 level is increasingly out of reach. Despite the pullback to $1,900, Ethereum’s fundamentals look solid. Development continues at a rapid pace, particularly focused on core layer scalability, privacy, and quantum resistance.
Critics who argue that Ether has a weak position may be surprised if market sentiment turns toward cryptocurrencies.
Ether has underperformed the broader crypto market by 9% in the first two months of 2026, casting doubt on the theory that external factors are the sole driver of this correction. Decentralized exchange (DEX) volume on the Ethereum network has fallen by 55% in the past six months, while rival Solana has fallen by a smaller 21% over the same period.
Ethereum DEX volume fell to $56.5 billion in February 2026, down significantly from a peak of $128.5 billion in August 2025. During the same period, Solana’s annual volume reached $95.5 billion, down from $120.6 billion in August. This decline in activity impacted network fees and decentralized application (DApp) revenue, effectively reducing the immediate incentive to hold Ether.
Institutions are choosing Ethereum over other blockchains
A narrow focus on volume ignores the fact that Ethereum holds a 57% market share in total block value (TVL), totaling $52.4 billion. When including layer 2 solutions such as Base, Arbitrum, Polygon and Optimism, Ethereum’s dominance reaches 65%. In comparison, Solana’s TVL is $6.4 billion, while BNB Chain has a total of $5.5 billion in smart contracts.
Major institutions including JP Morgan Asset Management, Citi, Deutsche Bank and BlackRock have recently launched onchain projects using Ethereum. From tokenized funds to dedicated Layer 2 aggregations and bank-issued stablecoins, Ethereum remains the hotbed of decentralized finance (DeFi) innovation, commanding a 68% market share in Real World Assets (RWA).
Ethereum’s strategic decision to prioritize layer-2 scalability through aggregation has been called a failure in part because competing chains such as Tron and Solana are currently leading the network’s payments. Regardless of how critics evaluate the decision to subsidize the accumulated costs, no “Ethereum killer” has been able to match its monetary value. Even the highly successful Hyperliquid holds $1.5 billion in TVL.
Vitalik Buterin, the co-founder and lead architect of Ethereum, recently expressed his intention to reduce the dependence on rollups by aiming for the scalability of the core layer. According to Buterin, the proposed changes include block parallelization, aligning gas costs with real-time execution, and implementing an Ethereum Virtual Machine (ZK-EVM).
These updates will be implemented gradually. Buterin recommends that a minority of the network participate before moving to mandatory block verification systems that rely on ZK-EVM. In addition, Ethereum maintains a clear roadmap for navigating the era of quantum computing, which includes consensus-layer signatures based on privacy-oriented proof systems.
related to: Why institutions prefer Ethereum despite faster blockchains
Buterin acknowledged that quantum-resistant signatures are significantly larger and more difficult to verify, noting that mesh-based solutions are currently ineffective. Therefore, the proposed solution includes recursive signature correction of the protocol layer and proof aggregation during vector mathematical preprocessing to reduce gas costs. Although the Ethereum network is not yet perfect, there is a plausible path to scalability.
Before dismissing ETH as a failure, it is worth analyzing what made the network successful compared to competing DApp-focused blockchains. Decentralization and trust will take years, if not decades, to establish. ETH maintains a significant first-mover advantage and is well-positioned to capture future growth in demand for institutional-grade onchain activity.
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