L2 chains decreased their stablecoin liquidity by $1B in December.
Ethereum’s chain invited the largest net inflows in 2025. The chain became a hub for high-value DeFi liquidity, which returned to the main layer from other L2 chains.
Despite the growth of DeFi activity on other chains, the Ethereum ecosystem brought back the biggest share of liquidity onto its L1 network. The Ethereum network reached $4.2B in net flows for 2025, despite short-term shifts of liquidity to other chains. In the long term, Ethereum was a central hub for bridging activities.
The biggest outflows were from Arbitrum, which lost some of its liquidity as DeFi shifted to the main network. Ethereum kept adding liquidity, with $195M inflows in the past week.
Hyperliquid had the second-biggest net inflows, retaining an additional $2B in 2025. In the past year, ecosystem flows shifted multiple times, showing traders were not seeking a specific chain but venues with more active trading and liquidity.
As Cryptopolitan reported earlier, Ethereum also reached a peak in smart contract creation and usage in 2025.
Ethereum activity reached over $64B in inflows and around $60B in outflows for the past year, also taking the top spot in overall liquidity flows. The main reason for Ethereum’s dominance is the available bridges, which usually connect other chains to Ethereum.
The usage of stablecoins also meant Ethereum was a key hub for settlements. While stablecoins can be bridged to other networks for trading, Ethereum-based versions are the most liquid. Some users bridge their assets to Ethereum in the final stretch, as ERC-20 tokens are widely represented on exchanges and on DeFi protocols.
One of the big shifts in on-chain liquidity happened around the October 10 liquidation event. From October 12 onward, the share of L2 chains diminished, as liquidity returned to Ethereum.
The riskier protocols on L2 chains were quickly abandoned, leading to added inflows on Ethereum. As of December 29, L2 chains take up 13.5% of the Ethereum ecosystem economy. The main net still carried the bulk of apps.
Ethereum became more usable as gas fees returned to record lows. L2 networks still carry the biggest number of transactions, over 93% of on-chain activity in the ecosystem. However, the L1 chain carries the biggest share of liquidity.
L2 chains only held 8.8% of the total stablecoin supply, peaking at $18B. In the past month, L2 chains lost $1B in stablecoin liquidity as the market contracted.
The main challenge for the adoption of Ethereum was the volatility of ETH. Until December 29, ETH had a net loss of 12.1%, after wiping out over 29% in the last quarter.
ETH traded at $2,930, though briefly recovering above $3,000. ETH ranged between a yearly high of $4,948 and a low of around $1,400. Over the past year, ETH has still invited whale buying and increased DeFi lending activity. However, it failed to fulfill the expectations for a hike to a higher range.
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