Ethereum’s grip on decentralized finance is weakening, even as it remains the largest single-chain DeFi network by total value locked. According to DefiLlama data cited in the report, Ethereum’s share of total DeFi TVL fell from 63.5% in January 2025 to 53% in May 2026, putting it near a multi-year low. The decline does not mean Ethereum has lost leadership in absolute terms, but it does show that capital is spreading across a broader set of chains at a faster pace.
Ethereum Still Leads, but the Gap Is Narrowing
In raw dollar terms, Ethereum still holds roughly $45.5 billion in DeFi TVL, more than any rival chain on its own. However, the broader market picture is changing. The report says Solana accounts for 6.76% of total DeFi TVL, followed by BNB Chain at 6.55%, Bitcoin at 6.16%, Tron at 6.01%, Base at 5.31%, and Hyperliquid at 1.82%. Combined, non-Ethereum chains now represent about 47% of the global DeFi market.
Cheaper Networks and Native Ecosystems Attract Liquidity
Several factors are driving Ethereum’s share lower. Competing chains generally offer lower transaction costs, while some have built stronger native DeFi ecosystems capable of retaining users and liquidity. The article points to Solana protocols such as Jupiter, Raydium, and Kamino, as well as PancakeSwap on BNB Chain, as examples of platforms that have attracted billions of dollars that may once have defaulted to Ethereum-based applications.
Layer-2 Growth Complicates the Picture
A major part of the shift also comes from Ethereum’s own scaling ecosystem. Networks such as Base, Arbitrum, and Optimism ultimately settle to Ethereum, but DeFi dashboards usually track them as separate chains. That means part of Ethereum’s broader economic footprint is being counted outside the mainnet. If Layer-2 TVL were grouped under the Ethereum umbrella, its effective share of DeFi liquidity would be meaningfully higher.
The timing is important as Ethereum faces continued debate over fee revenue, the speed of its development roadmap, and rising pressure from faster and cheaper alternatives. At the same time, the multichain direction appears increasingly structural. Base creator Jesse Pollak said on May 9 that the goal is to “bring every financial instrument onchain.” Whether that future is centered on Ethereum mainnet, its Layer-2 stack, or rival chains will likely define the next phase of DeFi growth.