Since the start of Q3 2025, the crypto market has experienced a historic rally. Both $BTC and $ETH have reached new all-time highs, but the spotlight clearly falls on $ETH, driving growth across projects that stand to benefit from its surge.
1.Why Has Ethereum Outperformed the Market Recently?
- Spot ETH ETFs: The primary catalyst has been institutional adoption via Spot ETH ETFs. Major financial players have been accumulating $ETH at scale, sometimes trading volumes surpassing $BTC. Notably, top investment firms like BlackRock reportedly sold part of their $BTC holdings to buy $ETH.
- DeFi & RWAs: Ethereum remains the dominant chain for DeFi and Real-World Assets (RWAs). Total DeFi TVL across chains sits at $161B, with Ethereum maintaining ~60% market share. RWAs integrate easily thanks to robust DeFi liquidity and are preferred by institutional issuers (BlackRock, Franklin Templeton), while ETH staking secures these multi-billion-dollar assets, positioning Ethereum as a safe settlement layer.
- ETH Staking: Staking continues to reduce circulating supply, supporting price. ETH staking has reached a record high of ~35.7M $ETH, roughly 30% of total supply.
- Layer 2 & Rollups: Active L2 networks like Base, Arbitrum, and Optimism contribute to ETH demand, as growing user activity and DeFi adoption push transactions off-chain.
2.Projects Indirectly Benefiting from Ethereum’s Rally
2.1 Liquid Staking & LSDfi
Catalyst: Rising $ETH prices drive staking activity. As more ETH is staked, demand for Liquid Staking Derivatives (LSDs) explodes, fueling growth in LSD-focused DeFi (LSDfi).
Key Projects:
- $LDO (Lido Finance): The LSD king, controlling >30% of staked ETH. Higher staking demand, especially fueled by Spot ETH ETFs, translates directly into protocol revenue. More staked ETH = higher fees captured.
- $RPL (Rocket Pool): A decentralized staking alternative. Amid concerns over Lido’s centralization, Rocket Pool attracts capital seeking true decentralization, even if on a smaller scale.
- $FXS (Frax Finance): Offers frxETH, a fast-growing LSD product. The LSD + stablecoin combo lets Frax capture staking yield while maintaining a stablecoin narrative in DeFi.
2.2 Layer-2 Scaling (Rollups)
Catalyst: ETH price surges → on-chain gas fees rise → users and developers migrate to L2s. L2s become growth proxies for the Ethereum ecosystem.
Key Projects:
- $ARB (Arbitrum): The largest L2 by TVL with a vibrant DeFi ecosystem. A testbed for new models and concentrated liquidity.
- $OP (Optimism): Backbone for Basechain (Coinbase’s L2), the largest onramp. Narrative: Superchain connecting multiple rollups. Favored by major projects like Worldcoin and Friend.tech.
- $MNT (Mantle): Strong backing from Bybit/BitDAO. Modular design (EigenDA) offers significant room for expansion. Positioned for the modular + L2 bull run narrative.
2.3 DeFi
Catalyst: ETH inflows into L1/L2 increase stablecoin demand, which serves as a liquidity gateway. RWAs provide real on-chain yield, and traders use derivatives for hedging/speculation, directly benefiting stablecoin and derivatives protocols in the DeFi revival.
Key Projects:
- $ENA (Ethena Protocol): Provides USDe (synthetic dollar) and yield-bearing sUSDe. Dubbed the “new MakerDAO.” Advantages: fiat-free, high yield attracting degens. Risk: delta-hedge dependent, reminiscent of LUNA-UST fragility.
- GMX: Largest perpetuals DEX on Arbitrum/Avalanche. Rising trader activity boosts volume, fees, and GLP/GM pool yields—a prime proxy for the on-chain perps revival.
- $AAVE: Top lending protocol, expanding with GHO stablecoin. Borrow/lend revenue rises as DeFi volumes recover. A blue-chip staple for many institutional portfolios.
2.4 Infrastructure / Restaking / Oracles
Catalyst: Ethereum scaling drives demand for oracle services, security, and restaking to ensure robust operations. These protocols form the ecosystem’s backbone, benefiting directly as ETH and L2s grow.
Key Projects:
- $LINK (Chainlink): Leading oracle infrastructure, providing off-chain data for most DeFi protocols. As RWAs grow, demand for off-chain data (T-bills, FX, commodities) rises, making Chainlink indispensable.
- $EIGEN (EigenLayer): The hottest narrative post-LSD, turning ETH restaking into a shared security layer for L2s, oracles, bridges, and DA. Potential to become a “second Lido” in security, as all services require it.
- $GRT (The Graph): Indexing and query layer for on-chain data. More on-chain apps (DeFi, SocialFi, GameFi) → higher indexing demand → The Graph becomes the “Google of blockchain.”
3.Conclusion
Ethereum’s recent growth is driven largely by institutional capital through ETFs and crypto-focused investment vehicles. Ecosystem projects have yet to fully mirror ETH’s surge, but sooner or later, these protocols are poised for explosive growth.
Disclaimer: This content does not provide investment, tax, legal, financial, or accounting advice. MEXC Learn shares information purely for educational purposes. Always DYOR, understand the risks, and invest responsibly.