Ethereum is getting closer to being flipped on its own blockchain, as other ERC-20 tokens now make up almost half of the total value stored on the network. However, the latest research from Messari Crypto suggests that while stablecoins have seen significant growth in the past few years, ETH still retains its privileged position on the Ethereum blockchain.
Ether is Taking Up Less and Less Value on the Ethereum Blockchain
Ethereum is getting dangerously close to being flipped on its own blockchain—this is the takeaway from Messari Crypto’s latest analysis into the state of the value locked on the world’s second-largest blockchain.
In a lengthy think-piece, Messari’s head of research Ryan Watkins dove deep into the issue of ERC-20 tokens and stablecoins on the Ethereum blockchain. The data showed that, over the past two years, there has been a complete transformation of how value is both stored and transferred on the Ethereum blockchain. 
Until mid-2016, ETH made up 100% of the value stored on the blockchain. Its dominance, however, began withering in 2018, and now makes up just over 50% of the total value stored on the blockchain.
Graph showing the total value stored on the network. (Source: Messari)
ERC-20 Dominance Doesn’t Bode Well for ETH But Cements Its Place
Watkins said that the growth of stablecoins in relation to the growth in value of ETH will be what decides whether or not ETH will remain the dominant force on the blockchain. The total market capitalization of ETH currently stands at $22.7 billion, while the market cap of all ERC-20 tokens, including stablecoins and exchange tokens, is $18.7 billion.
Graph showing the market capitalization of Ethereum-based assets. (Source: Messari)
Nonetheless, the transformation in value on ETH we’ve been seeing in the past few years isn’t just about stored assets—it’s also about the amount of value being moved. Watkins explained that Ethereum is on pace to settle more than $530 billion this year, with most of the growth being driven by the growth of stablecoins.
Annual settlement value on Ethereum. (Source: Messari)
While ETH’s decreasing role as a medium of exchange might not be positive for Ethereum in the long-run, Watkins said that the community well understands the need to maintain ETH’s privileged position on the blockchain.
“In short, Ethereum is being used more than ever, and in just two years, it has evolved from a blank canvas to an agglomeration of novel forms of value and use cases,” he said. “The question for investors is whether this development will eventually be rewarded or if the market will continue to shrug it off.”
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