Grab these entry points first: Binance Official Site, Official Binance App, iOS install guide. Ethereum (ETH) is the second-largest cryptocurrency by market cap. It completed "The Merge" in September 2022, switching from PoW to PoS consensus, and combined with the EIP-1559 burn mechanism introduced in 2021, ETH now runs at roughly 0.3% annualized net deflation. As of April 2026, ETH trades at about $3,500 USDT with a market cap of roughly $425 billion and a staking ratio of 28.4%. What sets ETH apart from BTC at its core is its positioning as the "world computer" — it carries the vast majority of crypto ecosystem applications, from DeFi to NFTs to L2s.
Ethereum was proposed by Vitalik Buterin in 2013, when he was 19. Vitalik felt Bitcoin (BTC) was too narrowly focused on payments, and proposed building a blockchain that could support Turing-complete smart contracts.
| Timeline | Event |
|---|---|
| Dec 2013 | Vitalik publishes the Ethereum white paper |
| Jul 2014 | Ethereum presale (ICO) raises $18.3 million |
| Jul 2015 | Ethereum mainnet (Frontier) launches |
| Jun 2016 | The DAO hack; hard fork splits ETH and ETC |
| Oct 2017 | Byzantium upgrade |
| Feb 2019 | Constantinople upgrade |
| Dec 2020 | Beacon Chain launches (start of the PoS chain) |
| Aug 2021 | London upgrade (EIP-1559) |
| Sep 2022 | The Merge completes |
| Apr 2023 | Shanghai upgrade (staking withdrawals unlocked) |
| Mar 2024 | Dencun upgrade (L2 blobs) |
| Q4 2025 | Pectra upgrade (validator optimization) |
In the 11 years since launching in 2015, Ethereum has shipped 12 major upgrades — the most frequently iterated project in crypto.
Ethereum is built from four core components:
| Component | Function | Technical detail |
|---|---|---|
| EVM (Ethereum Virtual Machine) | Executes smart contracts | 256-bit stack-based virtual machine |
| State tree (Patricia Trie) | Stores account state | Merkle Patricia Trie |
| Consensus mechanism | Nodes reach agreement | Proof of Stake (PoS) |
| Gas mechanism | Prices computing resources | EIP-1559 + tip |
ETH's current block time is 12 seconds, with roughly 15-30 transactions per block, for a theoretical TPS of about 15-30. With L2 scaling, the ecosystem's overall TPS can reach 1,000+.
On September 15, 2022, Ethereum completed The Merge, switching from Proof of Work (PoW) to Proof of Stake (PoS). It's one of the most complex protocol upgrades in crypto history.
Before and after the Merge:
| Dimension | Pre-Merge PoW | Post-Merge PoS |
|---|---|---|
| Consensus mechanism | Proof of Work | Proof of Stake |
| Block reward | 2 ETH/block | 0.04 ETH/block + staking yield |
| Annualized inflation | 4.6% | 0.5% |
| Combined with EIP-1559 burn | ~3% net inflation | ~0.3% net deflation |
| Energy consumption | 78 TWh/year | 0.01 TWh/year (-99.95%) |
| Cost of a 51% attack | ~$5 billion | ~$20 billion |
| Validator entry requirement | Mining hashrate | 32 ETH staked |
After the Merge, ETH's energy use dropped 99.95%, meaningfully boosting its ESG (Environmental, Social, Governance) rating.
EIP-1559 was a gas fee mechanism overhaul introduced in the London Hard Fork in August 2021, bringing in a two-tier pricing model of Base Fee plus Tip.
The core mechanics of EIP-1559:
First, the Base Fee for each block adjusts automatically based on how congested the previous block was. Second, the Base Fee doesn't go to miners/validators — it's burned outright. Third, the Tip portion still goes to miners/validators.
EIP-1559 burn data (source: ultrasound.money):
| Period | Cumulative ETH burned | Average gas price |
|---|---|---|
| Aug 2021 - Sep 2022 (PoW era) | 2.77 million | 35-150 Gwei |
| Sep 2022 - Mar 2024 (post-Merge) | 950,000 | 15-50 Gwei |
| Mar 2024 - Apr 2026 (post-Dencun) | 800,000 | 8-25 Gwei |
| Total | 4.7 million ETH | - |
The combination of the Merge and EIP-1559 has made ETH net deflationary. When the gas price is above 15 Gwei, ETH runs net deflationary; below 15 Gwei, ETH stays mildly inflationary.
Staking ETH requires locking up 32 ETH to run a validator node, or participating with smaller amounts through liquid staking (Lido, Rocket Pool).
| Staking method | Minimum requirement | Current annualized yield | Pros/cons |
|---|---|---|---|
| Solo validator | 32 ETH | 3.5-4.2% | Full control, high technical bar |
| Lido stETH | 0.01 ETH | 3.2-3.8% | Good liquidity, relies on Lido |
| Rocket Pool rETH | 0.01 ETH | 3.0-3.6% | More decentralized, smaller scale |
| Coinbase cbETH | 0.01 ETH | 2.8-3.4% | Compliance-friendly, charges a management fee |
| Binance/CEX staking | 0.01 ETH | 3.0-3.5% | Easy to use, carries custody risk |
As of April 2026, total ETH staked is about 34.2 million ETH, a staking ratio of 28.4%. Staking yield comes from three sources: newly issued ETH rewards, priority fees, and MEV (maximal extractable value).
ETH has no supply cap (unlike BTC's hard cap of 21 million), and its supply is controlled through a dynamic balance between issuance and burn.
| Date | Total supply (million ETH) | Annual growth rate |
|---|---|---|
| Jul 2015 | 72.0 (genesis) | - |
| Dec 2017 | 98.0 | +12% |
| Dec 2020 | 114.0 | +5% |
| Sep 2022 (Merge) | 120.3 | +0.5% |
| Apr 2024 | 120.3 | -0.05% (net deflation) |
| Apr 2026 | 120.5 | +0.1% (near equilibrium) |
After the Merge, growth in ETH's total supply has nearly stalled, and it has run net deflationary during some stretches. This is the core scarcity property that sets ETH apart from other chains' native tokens.
Ethereum mainnet's TPS limit (15-30) is addressed through L2 scaling solutions. L2s are layer-2 networks built on top of the Ethereum mainnet that inherit ETH mainnet security while offering much higher TPS and lower gas costs.
| L2 project | Type | TVL ($B) | Monthly active addresses (millions) | Average gas |
|---|---|---|---|---|
| Arbitrum | Optimistic Rollup | 7.8 | 0.95 | $0.04 |
| Optimism | Optimistic Rollup | 3.5 | 0.65 | $0.05 |
| Base | Optimistic Rollup | 2.8 | 1.80 | $0.02 |
| zkSync Era | ZK Rollup | 1.5 | 0.35 | $0.08 |
| Linea | ZK Rollup | 1.2 | 0.25 | $0.10 |
| StarkNet | ZK Rollup | 0.8 | 0.18 | $0.15 |
| Scroll | ZK Rollup | 0.5 | 0.12 | $0.12 |
Coinbase's Base L2 has been the fastest-growing L2 from 2024-2026, with monthly active addresses topping 1.8 million, surpassing the long-established Arbitrum.
DeFi (Decentralized Finance) is Ethereum's most important use case. As of April 2026, Ethereum's entire ecosystem (including L2s) holds about $75 billion in DeFi TVL, or 62% of all DeFi TVL.
| DeFi protocol | Type | TVL ($B) | Main assets |
|---|---|---|---|
| Lido | Liquid staking | 25.0 | stETH |
| EigenLayer | Restaking | 15.0 | ETH/LST |
| Aave | Lending | 28.0 | USDT/USDC/ETH |
| MakerDAO | DAI issuance | 9.5 | ETH/USDC/RWA |
| Uniswap | DEX | 4.8 | All tokens |
| Curve | Stablecoin DEX | 3.2 | USDT/USDC/DAI |
| Pendle | Yield derivatives | 2.8 | LST/yield tokens |
Governance tokens from DeFi protocols (UNI, AAVE, MKR, CRV, LDO, and others) make up an important part of asset allocation within the ETH ecosystem.
The spot Ethereum ETF was approved and launched in July 2024, six months after the spot BTC ETF. As of April 2026, spot Ethereum ETFs have accumulated roughly $2.8 billion in net inflows, with AUM of about $9.5 billion.
| Spot Ethereum ETF | Issuer | AUM ($B) | Cumulative net inflow |
|---|---|---|---|
| ETHA | BlackRock | 5.5 | 1.8 |
| FETH | Fidelity | 2.2 | 0.6 |
| ETHV | VanEck | 0.8 | 0.25 |
| ETHE | Grayscale | 0.5 | -0.28 |
| Others | - | 0.5 | 0.43 |
ETH ETF inflows are just 4.8% the size of BTC ETF inflows. The main reasons include ETH ETFs not being able to stake (missing out on 4-6% annualized yield), lower institutional awareness of the ETH narrative, and the ETF launch landing during a weak period for ETH.
The core of the Dencun upgrade (March 2024) was introducing EIP-4844 Proto-Danksharding, which gives L2s temporary blob storage space and cuts L2 gas fees by 10-100x.
Core improvements from the Pectra upgrade (Q4 2025):
The first improvement raises the validator cap from 32 ETH to 2,048 ETH, letting large institutional validators operate more efficiently. The second improvement is account abstraction (EIP-7702), which lets EOA accounts temporarily behave like smart contract accounts. The third improvement is the BLS12-381 precompile, which lowers verification costs for ZK Rollups.
The main risks ETH currently faces:
The first risk is L2 fragmenting traffic away from the mainnet. As the L2 ecosystem thrives, transaction volume on the ETH mainnet has been declining, and Coinbase-controlled L2s like Base could turn into "walled gardens."
The second risk is SEC regulation. Even though the SEC turned friendlier in 2025, whether ETH is fully exempt from being classified as a "security" hasn't been finally settled.
The third risk is staking concentration. Lido's liquid staking accounts for 27% of all ETH staked market-wide, creating centralization risk.
The fourth risk is competing chains like Solana (SOL) drawing applications away from the ETH mainnet.
The main channels for mainland China users to invest in ETH:
The first channel is holding spot on a CEX. Leading exchanges like Binance and OKX both support ETH spot trading — deposit USDT via C2C, then buy ETH spot.
The second channel is ETH staking. CEX platforms (Binance, OKX) offer ETH staking services with annualized yields of 3-3.5%. Mainland China users can also connect a self-custody wallet (MetaMask) to the Lido protocol to participate in stETH staking.
The third channel is participating in the L2 ecosystem. Bridge ETH over to L2 networks like Arbitrum and Base to participate in DeFi protocols there for extra yield.
Q: What is Ethereum (ETH)? A: The second-largest cryptocurrency by market cap, created in 2015 by Vitalik Buterin and others. Its core positioning is the "world computer," supporting Turing-complete smart contracts and carrying the vast majority of crypto ecosystem applications, from DeFi to NFTs to L2s.
Q: What's ETH's current price? A: As of April 25, 2026, ETH trades at about $3,500 USDT with a market cap of roughly $425 billion, making it the second-largest cryptocurrency by market cap.
Q: What was the Ethereum Merge? A: A protocol upgrade in September 2022 that switched Ethereum's consensus mechanism from PoW (Proof of Work) to PoS (Proof of Stake). After the Merge, energy use dropped 99.95% and annualized inflation fell from 4.6% to 0.5%.
Q: What is EIP-1559? A: A gas fee mechanism overhaul introduced in the London upgrade in August 2021 that burns the base fee outright. As of April 2026, about 4.7 million ETH has been burned cumulatively, making ETH net deflationary.
Q: Is ETH really deflationary? A: The combination of the Merge and EIP-1559 has given ETH roughly 0.3% annualized net deflation. When the gas price is above 15 Gwei, ETH runs net deflationary; below 15 Gwei, it stays mildly inflationary.
Q: How much yield does ETH staking offer? A: ETH staking currently offers an annualized yield of 3.2-4.2%. Solo validators earn the most (3.5-4.2%), while liquid staking through Lido/Rocket Pool runs slightly lower (3.0-3.8%). The staking ratio is 28.4%, with about 34.2 million ETH locked up.
Q: Which is the better investment, ETH or BTC? A: BTC is positioned as "digital gold," a store of value with a fixed supply of 21 million; ETH is positioned as the "world computer," an application platform carrying ecosystems like DeFi and NFTs. The two have fundamentally different properties, and it's generally recommended to hold both: BTC for defense, ETH for offense.
Q: What is L2? A: Layer 2 refers to scaling solutions built on top of the Ethereum mainnet that inherit ETH mainnet security while offering much higher TPS and lower gas. The major L2s include Arbitrum, Optimism, Base, and zkSync, cutting mainnet gas costs by 10-100x.
Q: What spot Ethereum ETFs are there? A: BlackRock's ETHA, Fidelity's FETH, VanEck's ETHV, Grayscale's ETHE, and others. As of April 2026, spot ETH ETFs have accumulated roughly $2.8 billion in net inflows, with AUM of $9.5 billion.
Q: Will ETH keep rising? A: ETH's long-term value depends on how its ecosystem develops (DeFi/L2/NFTs) and its deflationary supply mechanism. Its current MVRV of 1.4 is on the low side, suggesting the valuation is attractive, but fragmenting L2 traffic and competing chains are medium-to-long-term challenges.
Q: How can mainland China users buy ETH? A: The main channel is depositing USDT via C2C on the international versions of Binance or OKX, then trading for ETH spot. Staking yield can be earned through CEX platforms or by connecting a self-custody wallet to the Lido protocol.
Q: What is DeFi, and why is it so closely tied to ETH? A: DeFi (Decentralized Finance) refers to financial applications built on smart contracts. Ethereum is the main venue for DeFi, carrying 62% of all DeFi TVL. Leading DeFi protocols like Lido, Aave, and Uniswap are all built on the ETH ecosystem.
Data sources: Etherscan, ultrasound.money, DefiLlama, SoSoValue ETF data, CoinGecko historical prices. As of April 25, 2026.