Ethereum Onchain Volume Hits $320 Billion in August

In August, Ethereum's ecosystem reached a significant milestone as its monthly adjusted onchain transfer volume exceeded $320 billion, the highest since May 2021 and the third-largest month on record, according to The Block's data dashboard. This metric reflects the economic activity on the Ethereum blockchain, encompassing transfers, DeFi interactions, and various transactions. Throughout the month, the number of transactions also hit new highs, with monthly active ETH addresses nearly at all-time records, while total value locked approached an all-time high as well. This surge in activity coincided with a notable increase in accumulation from corporate Ether treasuries and a rise in spot ETH ETF trading, alongside the lowest average transaction fees in years. Public companies’ cumulative ether holdings increased from approximately $4 billion in early August to over $12 billion by month-end, significantly fueled by substantial purchases from BitMine Immersion and SharpLink Gaming. This wave of demand matched the earlier rise in ETH ETF volumes, hinting at a growing investor interest, especially since the ETF market now holds over 5% of Ethereum's total supply. Transaction costs on Ethereum also reached a five-year low, which helped enhance onchain activity. The upcoming March 2024 Dencun upgrade introduced EIP-4844, also known as “proto-danksharding,” which reduced data costs for rollups and shifted more transactions to low-fee Layer 2 solutions. Additionally, the recent Pectra release aimed to improve account abstraction, developer tools, and user experience, promising to enhance usability and throughput in the long run. Layer 2 activity increased as validator exit requests hit record highs, while entrance requests reached a two-year peak. Analysts attribute this movement partly to withdrawal-driven investments into liquid restaking protocols, which have attracted tens of billions this summer as operators capitalize on yield and liquidity. Experts from major banks, such as Standard Chartered, suggest that the market is undervaluing Ethereum's potential in light of treasury adoption and ETF demand, despite the strengthened ETH/BTC ratio throughout the year. Moreover, some large Bitcoin holders have diversified into ETH, fueling cross-asset flows. US public sector initiatives exploring blockchain for macro data have also spotlighted Ethereum's role as a versatile settlement framework. As of Friday afternoon, ETH was trading approximately 12% off its all-time high after recent market corrections, with a price near $4,337, down over 5% on that day.