JPMorgan Report: Ethereum’s Upgrades Haven’t Meaningfully Increased Network Usage

Ethereum’s recent network upgrades have yet to deliver a significant boost in core activity metrics, JPMorgan analysts revealed in their latest research.

The report, authored by Nikolaos Panigirtzoglou and team, states that daily transaction volumes and active wallet addresses have remained largely flat following recent enhancements like the Dencun and Pectra upgrades.

Although total value locked (TVL) on Ethereum grew modestly from March 2024’s Dencun upgrade through the May activation of Pectra, JPMorgan attributes this mostly to increased lending and borrowing activity on decentralized exchanges. Notably, this growth in TVL, when measured in U.S. dollars, trails behind the appreciation seen in ETH itself.

The May 7 Pectra upgrade aimed to improve staking efficiency, wallet capabilities, and overall network performance — features designed to appeal to institutional investors and set Ethereum apart in a competitive landscape. However, these technical improvements have not yet translated into heightened transaction activity or user engagement.

The bank also observed that average and total fees on the network declined after Dencun, reflecting a migration toward layer 2 scaling solutions. Meanwhile, an increase in ETH’s circulating supply post-Dencun has raised concerns about potential inflation risks amid tepid transaction growth.

Interestingly, futures market positioning suggests that institutional buying played a key role in ETH’s recent rally, which has pushed prices up over 45% in the last month, according to CoinDesk data.