ETH’s recovery was also fueled by a $307 million transfer by World Liberty Financial. Meanwhile, Hyperliquid surpassed Ethereum in weekly protocol revenue, while Ethereum validators approved a gas limit increase to boost network capacity ahead of the upcoming Pectra fork. While supporters see this as a step toward scalability, there are still some concerns over potential network instability. Trumps Help ETH Shake Off Losses Ethereum (ETH) recently rebounded past $2,900 after US President Donald Trump’s decision to halt his proposed tariffs on Canada and Mexico. The announcement came after a huge downturn in the crypto market, where ETH plunged by close to 16% in an hour to a local low of $2,368 on Feb. 2. This drop was likely due to the uncertainty surrounding the tariffs. By Feb. 3, ETH already recovered to $2,700 before Eric Trump took to social media and told his millions of followers that it was “a great time to add ETH.” Initially, his post also included the phrase “you can thank me later,” but he later edited it to remove those words. The market responded very positively to this, and ETH ended up climbing $2,913 before slightly pulling back to $2,718. The timing of Eric Trump’s endorsement also coincided with a large crypto transaction from World Liberty Financial (WLF), which is the digital asset firm linked to the Trump family. ETH’s price action over the past 7 days (Source: CoinMarketCap ) According to blockchain analytics firm Spot On Chain, WLF transferred more than $307 million worth of assets to Coinbase’s custody platform on Feb. 3. Additionally, WLF unstaked almost 20,000 Lido Staked Ether (stETH) into regular ETH and spent $5 million worth of USD Coin (USDC) to buy 1,826 ETH at a price of $2,738. Analysts speculate that these funds could be used to support WLF’s “Earn and Borrow” lending protocol, which is still in its early stages of development. The rebound in ETH’s price also also happened during the broader movements in the Ethereum ecosystem. In January, the Ethereum Foundation revealed an initiative that will further strengthen the network’s decentralized finance infrastructure. The foundation allocated 50,000 ETH to its treasury, which could be used for staking rewards. According to Ethereum core developer Eric Conner , these staking rewards could help sustain the foundation’s operational costs while reducing some of the selling pressure that has contributed to ETH’s relatively subdued price action this cycle. The Ethereum ecosystem also launched Etherealize, which is a marketing firm that is focused on promoting Ethereum’s institutional adoption. The firm launched on Jan. 22, and is working to present Ethereum’s investment case to Wall Street to attract more institutional interest in the network. Hyperliquid Surpasses Ethereum in Weekly Revenue After ETH’s recent downturn, Hyperliquid overtook Ethereum in seven-day protocol revenues. According to data from DefiLlama , Hyperliquid generated approximately $12.8 million in protocol revenues over the past week ending on Feb. 3, surpassing Ethereum’s $11.5 million. This shift proves that Hyperliquid is picking up momentum in the perpetual futures trading space, but it also means that Ethereum is facing challenges when it comes to competing with newer blockchains that offer faster transaction settlements and lower fees. Hyperliquid ahead of Ethereum on 7-day revenue on Feb.3 (Source: DeFiLlama ) Perpetual futures allow traders to buy or sell an asset at a future date without an expiration, and this feature has driven Hyperliquid’s rising transaction volumes . The network now processes close to $470 million per day in transactions, which is almost double its daily volume since the beginning of the year. Despite this impressive growth, Ethereum still has a much higher daily transaction volume, standing at around $4.7 billion as of Feb. 3. However, Ethereum’s protocol revenue suffered a decline in 2024 after the March Dencun upgrade. This is due to the fact that the upgrade reduced transaction fees by about 95%. Lower fees have led to a revenue shortfall, as there hasn’t been enough volume to offset the decline. Interestingly, some other Layer-1 blockchains also gained ground on Ethereum in different areas. Solana surpassed Ethereum in 24-hour decentralized exchange trading volume, driven largely by its meme coin activity. On Feb. 3, Solana’s daily transaction volume stood at about $8.9 billion, which was more than double Ethereum’s $4 billion. Hyperliquid’s recent rise is also evident in the success of its flagship perps exchange, which captured 70% of the market share. This allowed it to surpass competitors like GMX and dYdX. The exchange offers an experience very similar to centralized platforms, with fast settlements and low fees, although it is less decentralized than some of its counterparts. The network also gained impressive value after the launch of its native token, HYPE, which was distributed in a November airdrop. HYPE’s impressive December performance (Source: VanEck ) Despite its financial success, Hyperliquid still faces some key challenges. Its smart contract platform has not attracted a sizable developer community yet, and it is a crucial component for long-term growth. However, the network plans to introduce an Ethereum Virtual Machine-compatible smart contract platform in 2025, which VanEck believes is essential for sustaining Hyperliquid’s revenue growth and justifying HYPE’s high valuation. VanEck also warned that if Hyperliquid does not meet the expectations of its investors, the enthusiasm around HYPE could unravel quickly. Ethereum Validators Approve of Gas Limit Increase More than half of Ethereum validators signaled their support for raising the network’s gas limit, which is a big step toward increasing transaction capacity on the blockchain. According to Gaslimit.pics , 52% of validators backed the proposal as of Feb. 4, surpassing the required threshold of at least 50%. The decision allows the network to scale without requiring a hard fork, as validators can adjust their node configurations to support the higher limit. (Source: Gaslimit.pics ) Ethereum’s average gas limit stayed around 30 million since August of 2024 after an increase from 15 million. Data from Blockscout indicates the gas limit is already rising , with a transaction recorded at around 3 a.m. UTC showing a gas limit of more than 33 million. This is the first time since Ethereum transitioned to proof-of-stake after the Merge upgrade in September of 2022. Evan Van Ness pointed out that the shift to proof-of-stake required more time to coordinate changes due to its decentralized nature. After the successful vote, Ethereum co-founder Vitalik Buterin is pushing for the Pectra fork, which is expected to launch in March. Pectra will raise the blob target from three to six and will be subject to a similar staker-voted mechanism as the gas limit. Buterin stated that this approach ensures the network can scale in response to technological improvements without waiting for hard forks. The decision to increase the gas limit also caused some debate in the Ethereum community. Supporters argue that raising the limit to 36 million will boost network capacity and encourage more innovation. Ethereum researcher Justin Drake previously shared his support for this adjustment, and configured his validator for a 36 million gas limit in December 2023. Advocates Eric Connor and Mariano Conti also launched the Pump The Gas website in March to push for an increase to 40 million to help lower transaction fees. Opponents, however, warn that excessively raising the gas limit could jeopardize network stability. Ethereum Foundation researcher Toni Wahrstätter warned that a jump to 60 million gas per block could lead to propagation failures, missed validator slots, and other disruptions. The Pump The Gas website also acknowledged these risks, and mentioned that if the limit is set too high, it could become difficult for solo node operators to validate and download the chain.
