The Battle of Metrics: TVL vs. Institutional Inflows in Ethereum and Solana
Ethereum has been one of the worst-performing top 6 cryptocurrencies by market cap since the 1st of January 2023. This is despite Ethereum receiving the second-largest amount of institutional inflows behind Bitcoin last year.
Multiple key metrics can assess the growth potential of digital assets, but two of the most critical indicators are Total Value Locked (TVL) and Institutional Inflows. Solana has surged more than 1,800% since January 2023, while Ethereum has climbed just 128% in the same period. This is despite ETH Spot ETFs attracting over $4.8 billion in inflows last year. This discrepancy raises an important question: Which metric is more predictive of long-term price action and network strength, and what lies ahead for Ethereum in 2025?
What is Total Value Locked (TVL)?
TVL represents the total capital deposited in decentralised finance (DeFi) protocols, including staking, lending, and liquidity pools. It serves as a key indicator of investor confidence and ecosystem health—higher TVL suggests strong adoption and confidence, deeper liquidity, and sustained network demand. A growing TVL generally correlates with increased DeFi activity, making it a crucial measure of blockchain utility.
What Are Institutional Inflows?
Institutional inflows refer to capital allocations from hedge funds, asset managers, and other large financial entities into crypto assets. These inflows signal growing mainstream adoption, enhance market liquidity, and provide greater price stability, making the asset class more attractive to both retail and institutional investors. However, institutional money does not always translate to immediate on-chain growth.
While both metrics gauge market confidence and adoption, they do not always move in tandem. A prime example of this is Ethereum vs. Solana, where the interplay of institutional inflows, TVL growth, and price action presents a fascinating divergence.
Ethereum: Institutional Favourite, Sluggish TVL Growth
Ethereum remains the dominant smart contract platform, enjoying significant institutional support. Its capital inflows over the past three years reflect strong confidence in its long-term viability:
This surge in inflows underscores Ethereum’s reputation as the institutional-grade blockchain, driven by its robust ecosystem, staking yield opportunities, and role as the primary settlement layer for decentralised applications (dApps). However, these inflows have not yet translated into proportionate on-chain activity.
Since early 2023, Ethereum’s TVL has risen from $23 billion to $57 billion, a 148% increase. Over the same period, ETH’s price has gained only 128%, currently hovering around $2,880.
The core issue? The vast majority of institutional capital has flowed into Ethereum Spot ETFs rather than being deployed into DeFi. A crucial limitation is that Ethereum Spot ETFs are currently prohibited from participating in staking. This restriction prevents ETFs from fully leveraging Ethereum’s unique staking rewards, ultimately capping its TVL growth and broader ecosystem expansion.
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Solana: Explosive TVL Growth Despite Lower Inflows
In contrast, Solana has experienced a parabolic increase in TVL, despite attracting significantly lower institutional inflows.
While Solana’s cumulative three-year inflows of $383 million are just 7.5% of Ethereum’s 2024 inflows alone, its TVL tells a different story. Since early 2023, Solana’s TVL has skyrocketed from $2 billion to over $10 billion (February 2025), marking an unprecedented fivefold increase.
Solana’s price performance reflects this explosive growth. The asset has surged over?1,870%?since early 2023 and is now trading at approximately?$207.40. This suggests that, despite lower institutional participation, Solana is witnessing rapid organic adoption from developers and retail investors, leading to robust on-chain engagement.
Which Metric Matters More?
Both TVL and institutional inflows are critical, yet they paint different pictures of a blockchain’s adoption:
Ethereum’s deep institutional backing reinforces its status as the go-to blockchain for large-scale investors. However, Solana’s meteoric rise in TVL suggests that network activity and retail-driven growth can be equally, if not more, impactful in driving price appreciation.
Final Thoughts: The Ethereum Catalyst No One Is Pricing In
The next 12 months will be a defining period for Ethereum’s ability to translate its institutional inflows into meaningful DeFi adoption. The missing piece? Staked Ethereum ETFs.
Ethereum co-founder Joe Lubin has suggested that ETF issuers expect staked Ether ETFs to be approved under new SEC leadership. If or when this happens, it could trigger a paradigm shift. The current $4.8 billion in inflows into Ethereum Spot ETFs represents capital waiting to be staked—once unlocked, it could dramatically boost Ethereum’s TVL, reinforcing its network dominance and sparking a renewed wave of inflows as investors can capitalise on an interest-generating regulated investment.?
For investors, the implication is clear: Ethereum is sitting on a potential game-changer that the market has yet to fully price in. If staking-enabled ETFs are greenlit, Ethereum’s TVL could experience a large positive shift, driving both price appreciation and deeper institutional engagement. The battle between TVL and institutional inflows may soon converge—with Ethereum emerging as the ultimate beneficiary.
As always, market cycles can shift due to evolving dynamics, so staying informed is crucial. ICONOMI remains committed to delivering timely insights to help you navigate the exciting opportunities in digital assets.
If you want to learn more about the Cryptocurrency market - Schedule a 1-on-1 consultation with the author Anthony Fernandez - Head of Business Development at ICONOMI:
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1 周This was an interesting read, thanks for breaking it down ICONOMI. I hadn’t considered how much the inability to stake in Ethereum Spot ETFs might be holding it back. Do you think Solana’s performance is more about its technical advantages or just better market positioning right now?
Authentic & Ethical Thought Leadership Marketing. Founder, Strategist & Lead Writer, Susan Lawson Thought Leadership
1 周Any 'currency' that has zero real r'ship with company balance sheets...ick, ick, ick
FCA, Independent NED, Hospitality Specialist, Author & Photographer
1 周All in casino territory!