I’ll search for current information about Ethereum’s position…

I’ll search for current information about Ethereum’s position in the DeFi space and its competition in 2026.# Why Ethereum is Still the King of DeFi Despite Rising Competition in 2026

The decentralized finance landscape has undergone a seismic shift over the past year, with challengers like Solana capturing headlines and Layer-2 networks processing millions of daily transactions. Yet Ethereum still dominates DeFi infrastructure, commanding about 68% of all DeFi TVL as of early 2026. This dominance persists despite technical limitations, rising competition, and fragmentation across its Layer-2 ecosystem.

The total DeFi TVL across all chains sits around $130–140 billion in early 2026, marking a recovery from bear market lows but still below bull market peaks. Within this evolving landscape, Ethereum maintains around 68% of total DeFi TVL, with roughly $70 billion locked across its protocols. The question facing investors and developers isn’t whether Ethereum faces competition—it clearly does—but why it continues to hold such commanding market share despite faster, cheaper alternatives.

Market data paints a stark picture of Ethereum’s continued dominance. Ethereum remains the leader in Defi activity, controlling approximately 68% of total DeFi TVL ($71 billion as of December 2025). The network hosts the largest blue-chip DeFi protocols, with leading protocols including Lido with about $27.5 billion, Aave with $27 billion, EigenLayer with $13 billion, Uniswap with $6.8 billion, and Maker with $5.2 billion in TVL.

This concentration of capital isn’t accidental. Ethereum’s dominance through 2026 is driven by its strong stablecoin ecosystem, with over 191 billion dollars in stablecoins and a leading share of tokenized euros. The stablecoin market represents more than just trading pairs—it’s the foundation of DeFi’s monetary system. Over Christmas, stablecoin issuance on the network surpassed $59 billion, reinforcing Ethereum’s dominance as it accounted for more than 62% of the total market, significantly ahead of any competing blockchain.

Beyond raw TVL figures, Ethereum’s institutional appeal continues to strengthen. Tokenized assets like U.S. treasury bills, commodities, and real estate now account for over 50% of the RWA market, with Ethereum dominating as the settlement layer. According to recent data, Ethereum currently hosts $12.5 billion in tokenized assets, accounting for over 65% of the market. Its nearest competitor, BNB Chain, holds just $2 billion, while Solana and Arbitrum each account for under $1 billion.

Why Speed Alone Doesn’t Win the DeFi Game

Solana’s technical superiority in raw performance metrics is undeniable. Solana’s hybrid consensus model has enabled it to achieve 65,000+ transactions per second (TPS) under optimal conditions, dwarfing Ethereum’s base-layer throughput of 15–30 TPS. With sub-second block times and average fees of $0.00025, Solana appears ideally positioned for high-frequency trading applications.

Yet despite these advantages, Transactions, capital flow, DEX volume, and payments data offer insights into how the Ethereum and Solana contest is going in 2026. While Solana’s daily transaction activity hit a new peak of 160 million this month, this hasn’t translated into proportional DeFi dominance. Solana has emerged as a clear secondary hub with about $9.2 billion in DeFi TVL, less than a seventh of Ethereum’s total.

The reason lies in what actually matters for institutional DeFi. The network secures the largest share of DeFi total value locked at about $67.8 billion, hosts a stablecoin market cap of roughly $165.2 billion, and anchors an expanding Layer-2 ecosystem with around $43 billion in TVL. Ethereum’s modular architecture, while complex, enables something Solana cannot match: deep liquidity pools, battle-tested security guarantees, and regulatory clarity that institutional investors require.

The Institutional Trust Factor

Ethereum’s dominance in 2026 is not merely a function of its first-mover advantage but its adaptability to AI-driven automation and institutional-grade infrastructure. Ethereum remains central to decentralized finance, smart contracts, and Web3 primitives. This institutional confidence manifests in several ways.

First, security remains paramount for large capital allocators. Ethereum’s larger validator set and robust security guarantees make it a safer bet for institutional custodians. While critics argue Solana’s validator concentration and past network outages pose risks to long-term reliability, Ethereum’s track record of continuous operation since 2