The latest reports show that Ether (ETH) is being locked up in decentralized finance (DeFi) contracts at a massive rate in 2021. On the other hand, the amount that is being held on the centralized exchanges continues to fall drastically.
On May 7, 2021, Glassnode on-chain analytics provider, shared a chart comparing the total number of ETH deposited in Ethereum-based smart contracts to the number of Ether held on centralized exchanges in the last 17 months.
Since the start of 2021, the cumulative share of supply represented by Ether on centralized exchanges has plunged more than 25%, from about 17% to reach 12%. While the amount of ETH locked in DeFi protocols has increased by 75% since the start of 2021, the sum of ETH that is held on the centralized exchanges has dropped by nearly 30% within the same period.
In the same period, Glassnode noted that the percentage of ETH locked in smart contracts has increased by nearly three quarters, rising from 13% to 22.8%, showing that DeFi is constantly eating into the centralized exchanges’ profits from Ethereum trading fees.
Figures obtained from crypto data aggregator DeFi Llama show that Ether equivalent to around 9% of the supply is locked in smart contracts hosted by networks instead of the Ethereum mainnet.
DeFi Llama estimates that around 8.3 million coins or 7% of the circulating Ether are locked in Binance Smart Chain protocols, while 286,153 Ether or 0.25% of supply is locked on Solana. On the other hand, 103,902 ETH 0.09% is on Avalanche. Around 1.6% or 2.8 million Ether coins are locked in ‘other’ networks.
Ether’s massive rally into new all-time highs above $3,500 has renewed the debate of a ‘flippening’ over Bitcoin, with Ether futures volumes shortly outpacing the Bitcoin markets this week.