Bankless Interpretation: Is the Era of Value Storage Coming? Five Key Signals for Ethereum's Q2 Transformations

Source: BANKLESS

Original Title: "Ethereum's Store of Value Era"

Compilation and Organization: BitpushNews

Yesterday, The DeFi Report released an analysis report of Ethereum's second quarter data, revealing a network in transformation.

Despite a decline in protocol revenue and on-chain transaction fees due to the Pectra upgrade and increased Layer 2 usage, the report indicates that a deeper trend is occurring: Ethereum is showing clear signs of transitioning from a "utility token" to a "store of value asset."

The following are the five core points of the report, providing a clear framework for the transformation of Ethereum as a "monetary asset":

1. Institutions are aggressively buying ETH

In the past quarter, the speed at which ETH entered institutional balance sheets has been unprecedented, mainly achieved through two paths: ETFs and company treasuries.

ETH ETF: The managed asset size increased by 20% quarter-on-quarter, reaching 4.1 million ETH, accounting for 3.4% of the total supply. This is the largest quarterly increase since tracking began, with Fidelity's FETH leading the inflows.

Company treasury: ETH holdings increased by 5,829%, reaching 1.98 million coins. SharpLink Gaming increased its holdings by 216,000 ETH, including direct purchases from the Ethereum Foundation; Bit Digital increased its holdings by over 100,000 ETH. A total of 48 institutions have included ETH in their treasury.

Tom Lee, Chairman of Bitminer, stated that they view ETH as a "stablecoin chip". In the future, companies may operate their own stablecoin networks by holding and staking ETH, which will also intensify institutional demand for ETH.

The DeFi Report believes that this trend is reminiscent of the early institutional adoption path of Bitcoin: ETFs and vaults have become the main buyers, rather than being used for trading or paying gas, and ETH is being redefined as a long-term store of value, leading to a contraction in its circulation.

2. Funds are flowing out of the exchange and moving towards long-term holding.

In the past quarter, ETH has steadily exited high liquidity trading markets, transitioning towards being locked or strategically held, which is typical behavior for a value storage asset.

Withdraw from Exchange: The ETH holdings in centralized exchanges have decreased by 7%, which may have been transferred to cold wallets, staking contracts, or institutional custody accounts. This change aligns with the upward trend in staking ratios.

Decrease in DeFi usage: The proportion of ETH in smart contracts has dropped by 4% to 43% of the total supply. However, this does not indicate a sell-off, but rather that users may choose to re-stake or allocate to ETFs.

The circulating supply of ETH increased by only 0.18% this quarter, indicating that even with slight inflation in the network, the market can still effectively absorb the new issuance.

The DeFi Report points out that this behavior is similar to the phenomenon of "dollar hoarding" during times of economic uncertainty—users choose to store value in ETH rather than using it for frequent trading or speculation.

3. Staking has become an important vehicle for passive income in ETH.

The ETH staking mechanism is shaping it into an interest-bearing store of value, with its continued growth reflecting the market's long-term confidence in this asset.

Total ETH staked: increased by 4% to 35.6 million, accounting for 29.5% of the supply, setting a new historical high. Despite the reduction in transaction fees after the Pectra upgrade, staking still provides considerable returns, with an average daily issuance reward of 2,685 coins and an annualized yield of 3.22%.

Reward Structure: 88% of the validator rewards come from the new issuance of ETH rather than on-chain fees. This also means that ETH itself is becoming a "yield-generating asset."

This makes ETH closer to a "yield-bearing bond" rather than just a speculative asset. The staking mechanism is transforming Ethereum from a "transaction chain" into a "monetary network."

4. Inflation returns, but ETH has matured more.

Although the net inflation of ETH seems to be a bearish signal, the DeFi Report believes it marks the structural maturity of ETH.

ETH issuance rises: The total issuance of ETH increased by 2% this quarter, while the amount burned decreased by 55%, resulting in an annualized net inflation rate of 0.73%, reaching a new high in a year.

On-chain efficiency declines: the production cost of unit on-chain revenue rises by 58%, and actual on-chain revenue decreases by 28%.

Despite the return of inflation, the market has not sold off; instead, the staking pools and ETFs continue to absorb ETH. Michael Debault, the founder of DeFi Report, pointed out that this phenomenon is similar to Bitcoin's early cycles — users are accepting a certain level of inflation in exchange for the long-term security and sustainability of the network.

Nowadays, ETH resembles a monetary system with "planned inflation" and "embedded yield," which is different from traditional public chain assets. More importantly, even when economic data is weak, holders still maintain their confidence. This behavior of "not selling even through inflation" is the core characteristic of a value storage asset.

5. The Ethereum mainnet is becoming the "settlement layer".

Ethereum Layer 1 is gradually abandoning its role as a "transaction engine" and transforming into a foundational layer for capital carrying and final settlement — this is the characteristic of a currency-type network.

L2 Activity Surge: The daily trading volume of Layer 2 is 12.7 times that of the mainnet, and the number of active addresses is 5 times that of the mainnet; the number of smart contracts with high interaction frequency on L2 is 5.7 times that of the mainnet; DeFi trading speed also leads the mainnet by 7.5 times.

The mainnet remains the anchor for assets: Despite the migration of trading activities to L2, the TVL (Total Value Locked) of the mainnet still rose by 33%. The scale of real-world assets (RWA) grew by 48% quarter-on-quarter, reaching 7.5 billion USD, primarily consisting of tokenized government bonds and commodities.

The DeFi Report believes that this pattern is similar to the traditional financial system: secondary platforms are responsible for transactions and operations, while the main layer is responsible for final settlement. The Ethereum mainnet is the "bulletproof block space," and ETH is its core reserve asset.

Summary: ETH is becoming a "monetary sovereign asset"

The Q2 report clearly outlines the trajectory of ETH transitioning from a "utility token" to a "sovereign bond."

Whether it's ETFs, vaults, or staking contracts, ETH is gradually withdrawing from the high-frequency trading environment and moving towards long-term holding. Layer 2 has taken on the execution layer functions, while the Ethereum mainnet has solidified as a capital platform and a real asset anchor. Staking rewards mainly come from issuance rather than transaction fees, and the structure is increasingly resembling early monetary systems.

In other words: ETH is no longer just fuel, but has become an inseparable value carrier of the network itself.