TLDR
Ethereums share of DeFi total value locked has dropped to about 53 percent, its lowest level in years, as rival chains and Ethereum layer 2s gain ground.
- Ethereum DeFi dominance has fallen from roughly 63.5 percent in early 2025 to about 53 percent, with around 45 billion dollars TVL, while Solana, BNB Chain, Tron, Base, and others grow.
- The shift is driven by lower fees and faster execution on competitor chains, plus DeFi growth on Ethereum-aligned layer 2s that analytics count separately.
- For ETH holders and DeFi users, the key question is whether future growth and value capture sit on Ethereum mainnet, its layer 2s, or competing base layers.
Deep Dive
1. How Big The Shift Is
DefiLlama data cited by Bitcoin.com shows Ethereums share of global DeFi TVL dropping from about 63.5 percent in January 2025 to roughly 53 percent in May 2026, near a multi year low, with around 45.5 billion dollars locked on Ethereum itself.
Over the same period, non Ethereum chains collectively climbed to about 47 percent of DeFi TVL, with Solana near 6.7 percent, BNB Chain about 6.6 percent, Bitcoin around 6.2 percent, Tron about 6.0 percent, Base around 5.3 percent, and Hyperliquid near 1.8 percent in one recent snapshot.
CryptoSlate reports similar figures around 54 percent for Ethereums DeFi share, reinforcing that this is a structural change, not a single day blip.
Ethereum still leads by a wide margin on absolute TVL, but it no longer dominates DeFi to the same extent as in prior cycles.
2. Why Ethereum Is Losing Share
Reports attribute the decline in dominance to cheaper, faster rivals where trading and farming are more cost effective, especially Solana and BNB Chain, whose DeFi native protocols like Jupiter, Raydium, Kamino, and PancakeSwap attract large flows.
At the same time, Ethereums own growth has shifted toward layer 2s such as Base, Arbitrum, and Optimism, which settle to Ethereum but are tracked as separate chains in most TVL dashboards, mechanically lowering Ethereum mainnet share even when the broader ecosystem grows.
There are also signs of developer and application momentum on Solana, which now accounts for a large share of non EVM developer activity and on chain transaction volume, suggesting some new products launch off Ethereum rather than on it.
Part of the loss is real competition, and part is accounting; Ethereum is competing both with external L1s and with its own rollups.
3. Implications And What To Watch
Despite lower dominance, Ethereum still anchors DeFi: it leads in TVL, hosts a large share of tokenized real world assets, and remains the settlement layer for many rollups and wrapped assets.
CryptoSlate notes scenarios where Ethereums DeFi share could rebound toward roughly 55 to 58 percent or compress toward 46 to 50 percent by late 2026, depending on whether specialist chains and rollups keep outgrowing mainnet.
For users, key signals include: TVL and volume trends on major competitors, growth of Base and other Ethereum layer 2s, and whether fee markets and incentives on Ethereum keep enough activity on its own rails rather than elsewhere.
If you care about DeFi exposure, it may matter more which ecosystems and apps you use than assuming Ethereum alone will capture all the upside.
Conclusion
Ethereums slide to roughly 53 percent DeFi dominance marks a clear shift from an Ethereum centric to a multichain DeFi landscape, even as Ethereum remains the single largest platform.
The outcome for ETH over the next cycle will likely hinge on whether its mainnet plus rollups can remain the default settlement stack while rival chains specialize and pull away specific use cases.
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