Analysts refute claims that Ethereum’s liquidity moat is collapsing: ETH still retains reserve asset value, with 36% of its total supply staked.
2026.10.10 12:49:44
Blockworks analyst Jake Koch-Gallup published a piece pushing back against claims that Ethereum is losing its liquidity moat, arguing that while ETH’s value-capturing ability and stablecoin market share face questions, its reserve asset status, Layer 2 ecosystem, and institutional adoption still form long-term competitive advantages. Addressing concerns over Ethereum’s low on-chain revenue, Jake noted that ETH’s valuation depends not only on real economic value (REV) but also on reserve asset and collateral premiums, with ETH’s current market cap roughly 1,100 times its REV over the past 12 months. Additionally, the growth of Layer 2 networks like Robinhood Chain and Base will strengthen Ethereum’s ecosystem, rather than signaling a full exodus of capital and applications from the network. Jake also pointed out that Ethereum currently holds around 65% of DeFi’s total value locked (TVL), a roughly 45% share of on-chain real-world asset (RWA) management, spot ETFs and corporate treasuries collectively hold about 13% of ETH’s total supply, and roughly 36% of ETH is staked. While Ethereum’s stablecoin market share has declined from around 51% amid dilution pressure, Jake believes its absolute size will still continue to grow as the overall stablecoin market expands. However, Jake also acknowledged that relying solely on ETH’s reserve asset premium, without sufficient revenue and value-recapture mechanisms, leaves its valuation sustainability open to debate.
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