Ethereum is the foundation for a digital civilization.

It is hardened, secure, and reliable. It is the bedrock necessary to support the digital cities being built on top of it.

Those cities are growing fast. Because Ethereum is open to everyone, many different users have found reasons to build on it:

• Markets use it as financial infrastructure
• Artists use it to give permanence to their work
• Assets use it as a settlement layer
• Communities use it to govern shared resources

This year Ethereum applications exploded into public consciousness. The old term “web3” became fashionable again as the world began to understand the vision of a more decentralized internet built on Ethereum.

Just like in 2018, 2019, and 2020 our goal is to zoom out and show you the bigger picture.

In our view, the most important developments this year in Ethereum were:

1. Layer 2 arrives - after years of development, L2 protocols launch on mainnet and expand Ethereum’s capacity
2. Creator economy goes mainstream - NFTs are everywhere and artists use Ethereum to earn billions
3. Core protocol upgrades - the Ethereum R&D community ships multiple upgrades, preparing for the transition to Proof of Stake
4. DAOs pass the tipping point - DAOs become a viable tool for communities to self-govern, accumulating billions of assets and drawing in new users

Before covering the themes above, let’s stop to take stock of Ethereum’s growth. In past years, we’ve tracked different core metrics that try to place Ethereum in context. This year, some of those metrics crossed important milestones.

A. What blockchains do people pay to use?

For the second year in a row, Ethereum is the world’s most in-demand blockchain.

Source: Cryptofees (cryptofees.info)

This graph shows the total transaction fees for selected L1 blockchains. This is the sum of all fees paid to use each L1 - to send transactions, or interact with a smart contract. In total, they represent the value of that blockchain’s total “block space” - the total transaction capacity of that blockchain in a given year.