Layer 2 chains process most transactions but see stablecoin balances fall by about 1B dollars in December, leaving Ethereum as the main settlement layer for major DeFi and stablecoin activity.
Ethereum closed 2025 with a clear lead in net capital inflows across public blockchains, underlining how strongly it still anchors decentralised finance despite intense competition from newer networks and Layer 2 solutions. During the year, the chain attracted about 64.5 billion dollars in inflows while 60.3 billion dollars moved out, leaving net inflows of roughly 4.2 billion dollars and confirming persistent demand for block space, settlement guarantees and liquidity on the mainnet. This balance between inflows and outflows offers a detailed picture of how capital rotated through bridges, exchanges and DeFi protocols before finally consolidating back on the base layer of Ethereum.
Across the full year, on-chain data shows a broad rotation of funds between major ecosystems, yet Ethereum finished with the highest reported net inflows, estimated at 4.2 billion dollars after comparing 64.5 billion dollars in inflows with 60.3 billion dollars in outflows. These figures capture capital that moved into and out of the network through decentralised bridges, centralised exchange gateways and other infrastructure, rather than just spot trading volume, which makes them a useful proxy for long term liquidity commitment. In the ranking of chains by net flows, a newer network, Hyperliquid, came second with around 2.9 billion dollars in positive net flows, an impressive result for a chain focused on perpetual futures and DeFi infrastructure but still well behind the mainnet in absolute terms. Sonic, WorldChain and Solana followed in the next positions, which highlights how competition for developer attention and user deposits has broadened beyond the older large caps, even while Ethereum retained the top position in net inflows. Over the final week of 2025 alone, the mainnet attracted about 195 million dollars in fresh net inflows, a late surge that helps explain why liquidity metrics strengthened again after a volatile fourth quarter marked by liquidations and risk reduction.
The inflow numbers come from tracking how assets crossed DeFi bridges, both canonical bridges linked directly to protocol governance and application specific bridges that connect individual dApps, and they help reveal a clear directional trend during the year. In the first half of 2025, many users shifted capital from the base chain to Layer 2 networks and alternative ecosystems in search of lower fees and more experimental yield strategies, which reduced visible liquidity on the mainnet. Later in the year, particularly after an October liquidation event that shook leveraged positions across the market, flows reversed and Ethereum began to recapture capital that had spread out to higher risk environments. Arbitrum, one of the largest Layer 2 networks by activity, recorded the biggest outflows among L2 chains as liquidity moved back toward the base layer, showing how concentrated risk and leverage can quickly unwind when sentiment changes. Other Layer 2 networks also saw outflows or at least slower growth, while bridges channelled more stablecoins and blue chip assets into the security envelope of Ethereum, where participants seemed more comfortable parking funds during a period of uncertainty. By the end of December, this consolidation translated into stronger net inflow figures for the mainnet despite choppy price action and heavy selling pressure earlier in the quarter.
At the end of 2025, Layer 2 networks processed the majority of transaction volume in the broader ecosystem, with estimates putting their share at over 93 percent of total transactions linked to Ethereum, yet they still held a comparatively small slice of the value. As of 29 December, Layer 2 chains represented only about 13.5 percent of the overall economy tied to the network, measured through metrics such as total value locked, bridge balances and stablecoin holdings. Stablecoin data underlines this gap even more clearly, because balances on Layer 2 networks fell by roughly one billion dollars during December alone and their share of the total stablecoin supply linked to Ethereum stood near 8.8 percent at month end. Earlier in the year, stablecoin balances on these secondary chains had reached a peak of around 18 billion dollars, so the year end position reflects a sizeable reduction in risk appetite and a clear preference for holding tokenised dollars closer to the settlement layer. On the mainnet, the core stablecoins, especially USDT and USDC, continued to rely on Ethereum as a primary home for high value balances, treasury positions and institutional flows, which helps explain why the chain managed to hold the top position in net inflows even as users executed most everyday transactions on rollups and other scaling solutions. In practice, Layer 2 networks now act as throughput engines for cheaper payments and trading, while Ethereum provides the settlement bedrock where large balances rest, dispute resolution happens and long horizon investors feel more comfortable keeping funds.
The inflow data sits alongside several other signals that describe how the network evolved through 2025, including changes in smart contract activity, behaviour by large holders and price performance over the year. On the development side, deployments and use of smart contracts reached a yearly peak, suggesting that builders continued to favour Ethereum as a primary base for DeFi protocols, infrastructure projects and on chain applications even when market prices struggled. Large holder behaviour also pointed to steady accumulation, as many so called whales chose to rebuild positions on the mainnet after the October liquidation wave had flushed out highly leveraged traders on derivatives venues and some high risk Layer 2 protocols. Despite these positive structural signs, the market price of the native asset did not mirror the strength seen in net inflows and activity metrics, since ETH traded around 2,930 dollars on 29 December, down about 12.1 percent on a year to date basis after a sharp 29 percent decline during the fourth quarter. This divergence between price and on chain liquidity often appears during late stages of deleveraging cycles, when investors shift from speculative altcoins and riskier venues into older assets and more secure chains before broader sentiment recovers. For Ethereum, the pattern supports a view of the network as a central hub for DeFi liquidity, stablecoin settlement and infrastructure level development, with Layer 2 networks and emerging chains taking on more of the transactional load while the mainnet continues to anchor the system in terms of security, value storage and cross chain connectivity.
The end of 2025 confirmed that Ethereum still occupies a central position in the digital asset landscape, with 4.2 billion dollars in net inflows, strong bridge activity and a clear role as the preferred settlement layer for major stablecoins and high value DeFi positions. Layer 2 networks handled most of the transactional volume and offered lower fees, yet they closed the year with only a modest share of the wider ecosystem economy and a shrinking portion of stablecoin balances after a one billion dollar drop during December. Capital moved back from riskier venues, especially after the October liquidation phase, and consolidated again on the mainnet, where liquidity conditions appear more stable and security assumptions remain stronger. Price performance for ETH did not track these structural gains, with the asset finishing the year near 2,930 dollars and showing a double digit decline both for the year and in the fourth quarter, but underlying flows and smart contract activity suggested that the network foundation continued to strengthen. In this context, Ethereum enters the new year with a solid base of liquidity, active builders and persistent stablecoin demand, while the surrounding ecosystem of Layer 2 solutions and alternative chains continues to expand around it.9
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