Ethereum leads DeFi capital flow in 2025 as liquidity returns to layer 1

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Ethereum emerged as the leading destination for net capital flow in 2025, solidifying its central role in high-value DeFi liquidity. Although DeFi activity expanded strongly across multiple Layer-2 networks, most of the liquidity ultimately returned to Ethereum’s Layer-1. Throughout 2025, Ethereum recorded over $4.2 billion in net capital flow, demonstrating its long-term dominance despite short-term capital shifts to other chains.

Arbitrum was the network with the largest capital outflows, as liquidity moved away from high-risk DeFi environments back to Ethereum. Meanwhile, Ethereum continued to attract new capital, including $195 million in just the past week. Hyperliquid ranked second in net capital flow with approximately $2 billion for the year.

Ethereum’s advantages stem from deep liquidity, a broad network of bridges, and an outstanding stablecoin ecosystem. The significant reduction in gas fees also improved usability, reinforcing Ethereum as the core layer of liquidity and payments for the entire ecosystem.

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