Ethereum’s Unshakable Throne: How Layer 2s Are Shaping the Future of Stablecoin Dominance

As of December 2025, the cryptocurrency landscape continues to be defined by Ethereum's foundational strength, particularly in the stablecoin sector. Recent data solidifies Ethereum's position as the undisputed leader, boasting a staggering $174.95 billion in stablecoin supply. This represents not only a commanding market share but also robust, sustained growth, with a 0.6% weekly increase and an impressive 63% annual expansion. This growth narrative underscores Ethereum's critical role as the primary settlement layer for digital dollars, a status that appears more cemented than ever. However, the story beneath this dominance is one of intense competition and strategic evolution on Layer 2 (L2) scaling networks. These networks are not merely ancillary platforms; they are becoming vital arenas for liquidity and user activity, each charting a unique path. Arbitrum One, for instance, maintains a strong second-place position with a $7.84 billion stablecoin treasury, demonstrating resilience despite a minor 1.2% weekly decrease. Its established ecosystem continues to attract significant capital. In stark contrast, newer entrants are posting explosive growth, signaling shifting tides. Base Chain has emerged as a standout performer, with its $4.53 billion in stablecoins reflecting a monumental 147% yearly surge. This meteoric rise highlights the potent combination of strategic partnerships, developer-friendly environments, and growing user adoption. Meanwhile, networks like Mantle, with its $668 million in stablecoins, represent the burgeoning cohort of specialized L2s carving out their niches. This divergence in trajectories—between established stability and hyper-growth—paints a picture of a multi-layered future where Ethereum's base layer security and liquidity are leveraged by a vibrant, competitive ecosystem of scaling solutions. For investors and practitioners, this evolution suggests that while Ethereum's core value is secure, the most dynamic opportunities and use-case innovations are increasingly proliferating across its Layer 2 landscape, which is rapidly becoming the primary battleground for the next generation of decentralized finance.

Ethereum Extends Stablecoin Dominance as Layer 2 Networks Jockey for Position

Ethereum's $174.95 billion stablecoin supply cements its market leadership, posting 0.6% weekly growth and 63% annual expansion. The network's dominance comes as LAYER 2 solutions show divergent trajectories in the race for liquidity.

Arbitrum One holds second place with $7.84 billion in stablecoins despite a 1.2% weekly dip, while Base Chain's $4.53 billion marks a 147% yearly surge. Mantle's $668 million position contrasts sharply with OP Mainnet's 55% annual decline to $548 million.

The stablecoin wars reveal Ethereum's structural advantage - its $184.8 billion total supply dwarfs competitors. Layer 2 networks face mounting pressure to demonstrate utility beyond speculative trading as the market matures.

Ethereum Network Activity Cools as Monthly Transactions Hit 12-Month Low

The ethereum network is showing signs of fatigue as on-chain activity slows alongside ETH's price decline. November recorded just 32.2 million transactions - the lowest monthly volume this year.

Market volatility appears to be dampening network usage, with reduced contract calls, transfers, and exchanges. The cooling activity suggests waning short-term appetite for Ethereum's blockchain services.

Analysts interpret the slowdown as a natural pause rather than structural weakness. "It reads more like a collective breath-catching moment," observes Everstake's ETH lead, noting the network's typically bustling activity has grown noticeably quieter.

Ethereum’s Fusaka Upgrade Goes Live, Enhancing Scalability and Speed

Ethereum's highly anticipated Fusaka upgrade has officially launched on the mainnet, marking a significant milestone for the network. The upgrade, activated at Epoch 411392, introduces Peer Data Availability Sampling (PeerDAS) as its flagship feature. This innovation promises to revolutionize scalability for Ethereum and its Layer 2 ecosystems.

PeerDAS delivers transformative benefits: Layer 2 networks gain up to 8x data throughput while maintaining decentralization. The technology fragments rollup data into smaller pieces, slashing node workload and enabling faster mainnet interactions. Transaction latency plunges from minutes to milliseconds—ushering in what developers call 'instant-feel' user experiences.

The Ethereum Foundation highlights dual advantages: drastically reduced blob fees for rollups and lower costs for end users. Market analysts are already speculating about Fusaka's potential to catalyze ETH price momentum, viewing the upgrade as a fundamental driver for renewed institutional interest.

Ethereum Fusaka Upgrade Delivers Layer 2 Efficiency and Scalability Leap

The Ethereum network has completed its Fusaka upgrade, marking a pivotal moment in its evolution. Deployed on December 3, 2025, the upgrade introduces 13 Ethereum Improvement Proposals (EIPs) designed to enhance Layer 1 performance and optimize data availability for rollups. Blob capacity has been increased eightfold, enabling cheaper off-chain data storage—a critical advancement for Layer 2 scaling solutions.

Transaction costs for Layer 2 rollups could plummet by up to 90% post-Dencun, while the network achieves sub-second finality and higher throughput. The upgrade also introduces the Blob Parameter Only (BPO) fork mechanism, allowing Ethereum to expand blob capacity without full hard forks. This innovation paves the way for biannual upgrades, aligning with ConsenSys' proposal for faster iteration to meet growing rollup demand.