Ethereum Continues To Migrate From CeFi To DeFi

Ethereum’s recent price climb showcased that the second-largest crypto to date is in a transition mode, as Ethereum on centralized exchanges is showing a decline over the past nine months.

Data from Glassnode shows that Ethereum on smart contracts is on an increasing trajectory since September 2020, starting from 12% to reach as high as 23% of the total Ethereum supply. In contrast, currently no more than 11% of the entire Ethereum supply.

Source: Glassnode

The Ethereum amount on smart contracts doesn’t necessarily mean the Ethereum tokens are locked from circulation. Platforms such as Lido offer staking services without having to lock up the principal.

However, Ethereum 2.0’s Beacon Chain deposit contract currently holds 4.4 million ETH, which is close to 4% of the entire supply. The amount would be locked until Phase 1.5 of the Ethereum transition to a Proof-of-Stake consensus algorithm.

According to data from Glassnode, almost 23% of the entire Ethereum supply, or 26 million ETH, is now held in DeFi and various other smart contracts.

Meanwhile, EthHub co-founder Anthony Sassano highlighted that from the 10.1 million ETH tokens, worth $80.95 billion, as of press time, money market protocols such as Maker, Aave, and Compound currently hold around 6.6 million tokens. Another 2.4 million ETH is used as a pairing asset for automated market makers. The remaining ETH amount is locked in smart contract wallets or cold storage. Gnosis Safe, for example, is holding 1.8 million ETH.

“All in all, it’s just good to see ETH being brought “home” into wallets individuals actually control instead of wallets that centralized exchanges control,” Sassano concluded.

Meanwhile, Ethereum is in a cooldown period from May 10’s all-time high of $4,197.47. The second-largest crypto to date made a 5% correction before regaining a current position above $4,000.