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Ethereum has been the dominant smart contract and decentralized application (DApp) network since its inception. An analysis of Ethers price (ETH) and market capitalization shows indisputable evidence that the blockchain has been gaining market share.

As shown above, Ethers dominance in market capitalization terms has grown over the past couple of years, from an 18% average in July 2021 to the current 20%. Excluding Bitcoin (BTC) from the analysis, Ethers market share presently stands at 40.6%, while its next competitor, BNB (BNB), holds a 7.2% share.

The disparity between Ethereum and others is also evident when analyzing the total value locked (TVL) on each networks smart contracts. Ethereum is the absolute leader with $24.6 billion in TVL, followed by Trons $5.4 billion and BNB Chains $3.3 billion.

The above chart depicts how Ethereums TVL market share declining from 70.5% in June 2021 to 49.5% in May 2022 as Terra and Avalanche gained a combined 20% market share. However, following the Terra ecosystem collapse in May 2022 which culminated in developers halting network activity Ethereum quickly regained a 58% market share.

Despite the emergence of DApps on the BNB and Tron blockchains, Ethereums leadership has remained uncontested over the past 12 months. This data shows the irrelevance of the total number of unique active wallets (UAW) interacting with smart contracts per chain.

For instance, according to DappRadar, WAX has 363,600 active users, followed by BNB Chains 517,300 30-day UAW. These figures are way higher than the Ethereum networks 66,300 unique active addresses, but they reflect much lower transaction fee, opening room for manipulation.

The Ethereum ecosystem has the highestnumber of active developers, surpassing 1,870, which is more than the next three competitors Polkadot (752), Cosmos (511) and Solana (383) combined.

Currently, the Ethereum network hasover 700,000 validators, with 99% of the balances locked in staking participating in the process. The 32 ETH threshold limit per validator undoubtedly inflates this number, but Lido, the largest known staking pool, controls 32% of the staking, with Coinbase coming in second with 9.6%.

Consequently, it is safe to say that Ethereum is far less centralized in terms of development and validation compared with Tron, BNB Chain and Solana.

Other reasons Ethers dominance has been on the rise, even as Bitcoin reached a 50% market share on June 19, include derivatives activity and its dominance of the NFT market

Ethers future contracts are essential for institutional trading practices like hedging and trading with leverage. Ethers cash-settled futures were added to the Chicago Mercantile Exchange in February 2021. To date, no other cryptocurrency, apart from Bitcoin, has reached the worlds largest derivatives exchange.

In futures markets, longs and shorts are balanced at all times, but having a larger number of active contracts open interest allows the participation of institutional investors who require a minimum market size. Ether futures aggregated open interest stands at $5.4 billion, while competitor BNB hold $380 million and Solana a mere $178 million.

Nonfungible tokens are a perfect example of how cheaper, faster transactions do not always translate to increased adoption. Nothing is stopping NFT projects from shifting between blockchains, whether for new listings or existing collections. In fact, y00ts and DeGods moved to Polygon earlier in 2023.

Despite facing gas fees that often break above $10, Ethereum remains the absolute leader in the number of buyers and total sales. According to CryptoSlam, the leading networkreached $380 million in sales over the past 30 days, while Solana, Polygon and BNB Chain totaled a combined $93 million.

Ultimately, the data favors Ethereum versus its competing smart contract-focused blockchains. The positive trend in Ethers dominance might fade over time if the promised network upgrade to allow parallel processing (sharding) does not come to fruition, but for now, Ethers 20% market capitalization share remains unchallenged.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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3 reasons why Ethereums market cap dominance is on the rise - Cointelegraph