Ethereum's Growing Dominance in Treasury Markets: Why It Outperforms Bitcoin and Solana in DeFi

In 2025, the DeFi sector has reached a $127 billion total value locked (TVL) milestone, reflecting a maturing market where institutional and retail capital increasingly allocate assets to decentralized protocolsCoinGecko Ranks Top Blockchains by TVL, Ethereum Dominates at $62.4 Billion^[4]. Amid this growth, Ethereum has solidified its position as the dominant blockchain for DeFi treasuries, outpacing both Bitcoin and Solana. As of June 2025, Ethereum held $62.4 billion in TVL, dwarfing Solana's $8.6 billion and Bitcoin's $6.1 billionCoinGecko Ranks Top Blockchains by TVL, Ethereum Dominates at $62.4 Billion^[4]. This dominance is not accidental but rooted in Ethereum's unique ecosystem advantages, including protocol innovation, developer activity, and institutional-grade security.

Ethereum's Ecosystem: A Foundation for DeFi Leadership

Ethereum's lead in DeFi treasuries stems from its role as the bedrock of decentralized finance. The network hosts over 1,388 DeFi protocols, compared to Solana's 232, underscoring its entrenched position as the go-to infrastructure for developers and investorsDominant DeFi Platforms by Total Value Locked: Ethereum, …^[3]. Key upgrades in 2025, such as the Pectra and Dencun upgrades, have optimized Ethereum's scalability and reduced transaction costs, enabling seamless execution of complex financial applicationsEthereum 2025 Development Status: Analysis of Scalability, …^[2]. These improvements, coupled with robust Layer 2 (L2) solutions like Arbitrum and Base, have driven Ethereum's TVL to new heights.

Layer 2 networks now handle 47% of Ethereum's daily transactions, with Arbitrum and Base securing $20 billion and $15 billion in TVL, respectivelyIs Ethereum’s DeFi Future on L2s? Liquidity, Innovation Say Perhaps Yes - CoinDesk^[1]. This shift reflects Ethereum's strategic evolution into a secure global settlement layer, where L2s facilitate fast, low-cost DeFi applications. For instance, Uniswap V4's customizable hooks, tested on L2s, exemplify Ethereum's innovation pipelineIs Ethereum’s DeFi Future on L2s? Liquidity, Innovation Say Perhaps Yes - CoinDesk^[1]. Such advancements ensure Ethereum remains the preferred platform for high-value DeFi projects, even as transaction activity migrates to L2s.

Solana's Speed vs. Ethereum's Security

Solana's rapid ascent in DeFi is driven by its 3,000–4,000 transactions per second (TPS) throughput and low fees, attracting retail users and gaming applicationsDominant DeFi Platforms by Total Value Locked: Ethereum, …^[3]. However, Ethereum's security and decentralization—backed by a 13-year track record—remain unmatched. While Solana's TVL grew by 6.51% in April 2025Dominant DeFi Platforms by Total Value Locked: Ethereum, …^[3], its reliance on a centralized validator model raises concerns about long-term resilience. In contrast, Ethereum's Proof of Stake (PoS) consensus, post-2022, balances energy efficiency with robust security, making it a safer bet for institutional capitalEthereum 2025 Development Status: Analysis of Scalability, …^[2].

Bitcoin's DeFi ambitions, meanwhile, are constrained by its design as a store of value. Though wrapped Bitcoin (wBTC) and layer-2 solutions like the Lightning Network have enabled limited DeFi participation, Bitcoin's TVL plummeted by 48.63% in April 2025Dominant DeFi Platforms by Total Value Locked: Ethereum, …^[3]. This decline highlights the limitations of a blockchain that lacks native smart contract capabilities, forcing reliance on third-party protocols that dilute its competitive edge.

Institutional Adoption and Real-World Assets (RWAs)

Ethereum's dominance is further reinforced by its leadership in tokenized real-world assets (RWAs). Despite Solana's 218% growth in RWA markets to $550 million in 2025Ethereum 2025 Development Status: Analysis of Scalability, …^[2], Ethereum controls 83.69% of the $6.5 billion RWA sectorEthereum 2025 Development Status: Analysis of Scalability, …^[2]. This institutional adoption—spanning tokenized stocks, real estate, and commodities—positions Ethereum as the bridge between traditional finance and DeFi, a role Bitcoin and Solana cannot replicate.

The Future of DeFi: Multi-Chain or Ethereum-Centric?

While Solana's speed and Bitcoin's brand recognition pose challenges, Ethereum's modular architecture and developer ecosystem ensure its long-term relevance. The rise of multi-chain ecosystems may allow Solana to cater to niche applications, but Ethereum's role as the “settlement layer” for high-value DeFi projects is irreplaceableEthereum vs. Solana: Who Will Dominate Smart Contracts in 2025?^[5]. For investors, this means Ethereum's TVL dominance is not a temporary trend but a structural advantage rooted in its ability to adapt to evolving market demands.

Conclusion

Ethereum's growing dominance in DeFi treasuries is a testament to its ability to innovate while maintaining security and decentralization. As the DeFi market expands, Ethereum's protocol upgrades, institutional partnerships, and L2 scalability solutions will continue to outpace competitors like Bitcoin and Solana. For investors, this positions Ethereum not just as a leading blockchain but as the foundational infrastructure for the next phase of decentralized finance.