Ethereum still concentrates the largest share of stablecoins and DeFi capital, even as newer, faster blockchains vie for users. Institutions tend to prioritize liquidity depth, counterparty confidence and mature infrastructure over headline throughput numbers, which helps explain why capital remains anchored to Ethereum.
Transactions-per-second metrics attract engineers and retail users, but institutional allocators look where the liquidity is. Kevin Lepsoe, founder of ETHGas and a former Morgan Stanley derivatives executive in Asia, argues that capital follows depth: stablecoins, tokenized funds and large asset pools live on Ethereum, and TradFi participants want the markets that can absorb large trades with minimal slippage and tight spreads.
Faster chains such as Solana boomed by onboarding retail traders during NFT and memecoin cycles, but those surges were often transient. Solana has even spawned its own “Solana killers” promising higher theoretical TPS, yet none have unseated Ethereum’s liquidity advantage. Institutions executing sizable transactions prefer venues that won’t move prices dramatically—an advantage Ethereum’s deep pools provide.
Institutional interest is shifting from speculative retail activity toward practical use cases like stablecoins and real-world assets (RWAs). Large players are already experimenting with tokenized products: BlackRock’s USD Liquidity Fund (BUIDL) began on Ethereum and still holds a significant share of its market cap on the chain. Stablecoins, which serve as a bridge between traditional finance and digital liquidity, are also concentrated on Ethereum, reinforcing its role as the primary distribution layer for institutional flows.
Layer-2 rollups helped reduce Ethereum’s fees and improved user experience, but they introduced liquidity fragmentation across multiple rollups. Lepsoe suggests that L2s may have prevented liquidity from migrating to competing L1s; without them, capital might have left Ethereum permanently. At the same time, some L2s have not delivered on decentralization goals, prompting a reassessment of how best to scale the network.
Ethereum’s roadmap aims to reconcile throughput improvements with its liquidity strengths. Planned upgrades such as the Glamsterdam fork will increase the block gas limit substantially, moving the mainnet toward much higher TPS over time. Infrastructure innovations—off-chain coordination for block construction, zero-knowledge bundling of transactions and improved oracle and execution layers—are also improving execution efficiency for institutional use cases.
Industry technologists note that institutions favor battle-tested networks. While they evaluate alternatives—Solana for performance, Canton for privacy—many see no immediate threat to Ethereum’s dominance in liquidity. Performance improvements can expand Ethereum’s capacity to handle institutional flows, but liquidity remains the core pull. In crypto markets, speed attracts users during booms, but large capital tends to stay where market depth and stability already exist.