• Ethereum ecosystem TVL has surged 16x since 2020, reinforcing ETH’s market resilience.
• Three sectors, stablecoins, lending, and staking, dominate 93% of Ethereum’s total value locked.
• The upcoming Fusaka upgrade could multiply network capacity and drive long-term demand for ETH.

Ethereum continues to strengthen its position as the leading blockchain for decentralized finance, with its TVL rising from $24 billion in 2020 to $379 billion in 2025, a 16-fold increase.

This remarkable growth highlights Ethereum’s maturing ecosystem and its deep link to ETH’s market performance. Over the same period, Ethereum’s market capitalization jumped from $47 billion to $502 billion, reflecting an 11x increase.

Data from Token Terminal shows that TVL has acted as a stabilizing force during major downturns such as the 2022 bear market and the April 2025 correction.

The platform’s data indicates that each correction established higher support levels for both the TVL and ETH’s valuation, suggesting growing investor confidence.

The composition of Ethereum’s TVL reveals the dominance of three market sectors: stablecoin issuers, lending, and staking. Stablecoin projects, led primarily by Tether, account for $189 billion.

Lending protocols such as Aave contribute $82 billion, while liquid and restaking services like Lido and EigenLayer add $73 billion. Together, these three categories represent 93% of Ethereum’s total ecosystem TVL.

Also Read: Ethereum (ETH) Eyes $5,000 as BlackRock Investment Fuels Confidence

Rising TVL May Lift ETH Market Value Significantly

In contrast to the above-mentioned figures, the present Ethereum TVL appears to comprise only a fraction of what can realistically be achieved once financial institutions become more proactive in the area of on-chain business.

For example, the $13.5 trillion-asset-managing firm BlackRock has only $2.9 billion worth of assets tokenized on the Ethereum network. On the other hand, the $6.4 trillion-asset-managing Fidelity has only $231 million worth of assets deployed on the network.

If the plans for tokenization come true among the leading asset managers, the TVL in the Ethereum network could increase as much as 10 times in the years to come.

Such a transition will not only attract more investments to the network but also revive the traditional relationship between the TVL and market capitalization of Ethereum, thereby revaluing ETH at substantially higher levels.

Fusaka Upgrade To Boost Ethereum Speed

The upcoming major update to the Ethereum network, Fusaka, plans to increase the network’s capacity from the current record 3,100 transactions per second (TPS) to 12,000 TPS.

This update will bring PeerDAS (Peer Data Availability Sampling) as well as improve the capacity of Blobs, thereby reducing layer-2 rollups’ fees.

As ETH researcher Leo Lanza explains, this efficiency gain will kick off a demand increase based on the Jevons Paradox: instead of excess capacity leading to efficiency gain, efficiency gain will increase usage.

As decentralized finance, tokenization, and settlements grow in usage, the Ethereum scaling plan based on EIP-7691 and upcoming blob upgrades would amplify the dominance of Ethereum.

Also Read: Ethereum (ETH) Forms Bullish Fractal Similar to 2020; Is $50,000 on the Horizon?