Ethereum recorded a shift in the number of on-chain users in January

Ethereum has achieved one of its strongest quarterly performances ever, setting new records for both the number of active users on the chain and total transaction volume in the first three months of 2026.

6/20/20263 min read

Is Layer 2 networking making a comeback?

Ethereum reportedly recorded record highs in on-chain user numbers and transaction volume in Q1 2026, marking one of its most active periods since the network's launch. This development is particularly noteworthy because it occurred amidst years of intense competition from newer blockchains like Solana, Sui, and Aptos. Instead of declining in importance, Ethereum appears to be entering a new growth phase as its ecosystem expands to include stablecoins, tokenized assets, DeFi, and institutional finance applications.

In previous cycles, much of the activity on Ethereum was typically tied to speculative waves like ICOs, NFTs, or memecoins. However, the current growth structure is significantly different. Increasingly, transactions on the network are coming from real-world financial activities such as:

Stablecoin payments
Tokenized asset transactions
DeFi lending
Settlement between organizations

This shows that Ethereum is gradually transforming from a blockchain primarily serving the crypto community to a digital financial infrastructure used by both traditional businesses and institutions. This diversification of demand sources has helped on-chain activity continue to grow even as the market is no longer solely dependent on speculative bubbles as before.

The indices broke records in the first quarter of 2026.

The network averaged over 1.2 million active addresses per day, pushing the quarterly total to a new record. This marks significant growth compared to Q4 2025, reflecting broader participation from individual and institutional investors.

Ethereum and its Layer-2 ecosystem processed over 450 million transactions in Q1, surpassing the previous high set at the end of 2024. Daily transaction volume frequently exceeded 2.5 million transactions when including cumulative transactions from Optimism and ZK.

The total value locked on the Ethereum mainnet and major L2 networks (Base, Arbitrum, Optimism) has exceeded $120 billion, driven by strong capital inflows into lending protocols, decentralized exchanges, and reset platforms. Notably, much of this growth comes from Layer-2 networks, which have successfully absorbed a large portion of individual investor activity and high frequency while retaining Ethereum's security guarantees.

Another factor contributing to Ethereum's record user base is the maturity of its Layer-2 ecosystem. In the past, high transaction fees were a major barrier to network scaling. However, after several significant upgrades and the development of Layer-2 blockchains like Arbitrum, Optimism, Base, and zkSync, Ethereum has been able to scale without sacrificing the security or decentralization of the original network. Instead of directly competing with other blockchains, Ethereum is evolving into a multi-layered ecosystem where Layer-1 handles security and Layer-2 processes most user activity.

The competitive landscape and Ethereum's position

While Solana has made impressive strides in risk-weighted assets (RWA) due to wallet holdings and transaction speed for individual investors, and chains like Tron continue to dominate certain stablecoin use cases, Ethereum maintains its leading position in overall ecosystem value and developer recognition. Its ability to scale through Layer-2 while maintaining decentralization and security remains a core differentiating factor.

Analysts note that Ethereum's record-breaking activity in Q1 reinforces its role as the "payment layer of the internet," with Layer-2 acting as a high-throughput execution environment. This modular architecture appears to be working effectively, allowing the ecosystem to grow without compromising the security and liquidity advantages of the mainnet.

Assessment and Conclusion

Ethereum's record-breaking on-chain user count and transaction volume in Q1 is a strong reminder that network fundamentals can differ significantly from price movements. In a cryptocurrency market fraught with geopolitical risks and macroeconomic uncertainty, Ethereum's resilience and continuous innovation lay a solid foundation for its next growth phase. Its ability to attract both individual investor activity on Layer-2 and institutional investment on the mainnet could prove to be one of the network's greatest long-term advantages.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrencies. This is not financial or investment advice at all. Every investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The opinion in the article does not represent the official position of the platform. We recommend that readers do their own research and consult experts before making any investment decisions.

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