April 3, 2025

Ethereum in 2025: Network, Usage, and Upgrades

As of March 2025, Ethereum secures over one million active validators, supports daily activity from individual users and large financial institutions, and underpins infrastructure for rollups, tokenized assets, and regulated digital finance. This position reflects a gradual evolution shaped by continuous protocol upgrades and expanded ecosystem participation.

Proof-of-Stake and Validator Dynamics

Ethereum finalized its transition to Proof-of-Stake (PoS) in September 2022. Validator numbers have since grown steadily, surpassing one million in February 2025. These validators attest and propose blocks every 12 seconds and collectively secure over 33.6 million ETH—about 28% of the total supply.

To address scalability challenges associated with this growing validator set, the upcoming Pectra upgrade (expected mid-2025) will include EIP-7251. This proposal increases the maximum effective stake per validator from 32 ETH to 2048 ETH, giving institutional stakers the ability to consolidate their operations without reducing protocol-level decentralization.

The Shanghai/Capella (Shapella) upgrade in April 2023 enabled validator withdrawals. Exit queues have generally remained short, often under 24 hours, supporting greater flexibility for participants.

Rollups, Data Availability, and Costs

The majority of Ethereum user activity now occurs on Layer 2 (L2) networks. By early 2025, Arbitrum and Optimism frequently processed over two million daily transactions combined, regularly exceeding Ethereum mainnet's throughput, which hovered under one million transactions per day.

The Cancun–Deneb (Dencun) upgrade, activated in March 2024, introduced EIP-4844 and blob-carrying transactions. Blobs, which provide ~125 KB of temporary data storage for rollups, are pruned after about 18 days. They offer a lower-cost alternative to calldata, reducing L2 data posting fees by over 90% in some cases. Adoption of blobspace has since grown across major rollups, including StarkNet and Optimism.

Ethereum's architecture remains intentionally modular. The Layer 1 protocol handles settlement and data availability, while execution is offloaded to rollups, in line with the long-term roadmap.

Staking Yields and Monetary Policy

As of Q1 2025, solo Ethereum validators earn approximately 4.1% annualized returns, while participants using liquid staking or custodial services receive around 3.0% to 3.5% after fees. Rewards are sourced from base issuance, transaction tips, and MEV.

Ethereum’s issuance has remained between 0.5 and 0.6 million ETH annually since the Merge. At the same time, EIP-1559 continues to burn base transaction fees. During periods of high activity, such as late 2023, daily burn rates exceeded 2,000 ETH. In quieter months like February 2025, daily burns averaged between 300 and 400 ETH. Total burned ETH since EIP-1559 now exceeds 5.1 million.

Net supply growth fluctuates with usage. Ethereum was briefly deflationary in early 2024 but returned to slight inflation in 2025 due to lower fees.

Institutional Applications

Ethereum remains the primary public blockchain for tokenized funds, regulated stablecoins, and other real-world asset (RWA) deployments.

BlackRock’s BUIDL fund, launched in 2023 on Ethereum, reached over $650 million in AUM by early 2025. Societe Generale issued the EURCV euro stablecoin on Ethereum in April 2023. Deutsche Bank, as part of Project Guardian, tested a compliance-focused rollup on zkSync in late 2024.

By early 2025, Ethereum-based RWA projects held more than four times the value of those on Stellar and more than ten times that of those on Polygon, according to Galaxy Digital.

Regulatory Landscape

The U.S. SEC approved multiple spot ETH ETFs in July 2024. Although the agency did not formally classify ETH as a commodity, the approval was interpreted by many as an indication that it is not a security. Futures-based ETH products have been available on CME since 2021.

In the European Union, the MiCA framework came into full effect in January 2025. ETH is treated as a crypto-asset under MiCA, not a security. This regulatory clarity has supported broader institutional involvement across EU member states.

Singapore’s Project Guardian has featured Ethereum-based pilots since 2022. In 2023 and 2024, regulated FX and bond settlement tests involved Ethereum mainnet and rollups.

Developer Ecosystem and Network Evolution

Ethereum had over 6,200 active monthly developers as of early 2025, per Electric Capital. More than half now work on Layer 2 platforms, such as Optimism, Base, and zkSync. Solidity remains the leading smart contract language, and the EVM continues to dominate cross-chain compatibility.

The network's development focus is on modular execution, Verkle tree adoption, light clients, and validator architecture changes. Rollup frameworks like OP Stack and zkStack are central to this modular expansion.

Security, Compliance, and Infrastructure

Since the Merge, Ethereum has experienced no chain halts or rollbacks. A finality delay in May 2023 caused temporary lags but was resolved without manual intervention. As of early 2025, no consensus client controls more than one-third of the network, improving resilience.

Coinbase, which operates over 120,000 validators, reported 99.75% uptime and no slashing incidents between April 2023 and March 2025. OFAC-compliant block production peaked at 79% in late 2022 but fell to 27% by January 2024. No censorship is enforced at the protocol level.

Institutions use compliance tools like Chainalysis, TRM Labs, and Elliptic to monitor Ethereum addresses and integrate AML/KYC checks into their systems.

Ethereum’s Role in 2025

Ethereum supports production-grade applications across finance, compliance, DeFi, custody, and infrastructure. It serves as the finality and data layer for rollups, tokenized funds, and regulated asset networks. Execution continues on Layer 2. Settlement and staking remain on Layer 1.

Upgrades such as Pectra and Verkle tree implementation are in progress. Ethereum's direction remains consistent: decentralization, scalability via rollups, and conservative issuance supported by fee burns. There is no final version—just ongoing deployment.

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April 3, 2025

Ethereum in 2025: Network, Usage, and Upgrades