Fundamental Overview Deep Dive Fundamental Analysis: Ethereum (ETH) Introduction As long-term investors focused on sustainable value creation, our analysis centers on foundational assets exhibiting robust utility, evolving tokenomics, and significant adoption curves. Ethereum (ETH) remains the preeminent smart-contract platform, serving as the indispensable settlement layer for decentralized finance (DeFi), Non-Fungible Tokens (NFTs), and the broader Web3 ecosystem. This deep dive moves beyond short-term price fluctuations to rigorously assess the network's intrinsic value proposition as of December 4, 2025. The "Big Picture" narrative for Ethereum is one of digital infrastructure dominance cemented by institutional integration. Recent market data indicates Ethereum maintains a significant market presence, with its market capitalization estimated around 366 billion or 6.455 trillion (in IDR), and a corresponding market dominance of approximately 16%. The Total Value Locked (TVL) on the network continues to anchor the decentralized economy, exceeding 66 billion. Furthermore, the tokenomics are increasingly compelling due to structural supply dynamics. Deflationary mechanics from EIP-1559, coupled with substantial institutional accumulation where corporate treasuries and ETFs now collectively hold over 10% of the circulating supply are creating a significant de facto scarcity. This demand is reinforced by attractive staking yields, positioning ETH$ as a compelling yield-bearing asset for institutional portfolios. This report will thoroughly examine the post-upgrade developer activity, the impact of Layer 2 scaling solutions, the sustainability of DeFi growth, and the evolving regulatory landscape that is solidifying Ethereum's role as a core component of the global digital asset strategy. Deep Dive Analysis The main body of this Fundamental Analysis focuses on the core value drivers of Ethereum (ETH), assessing its structural economics, on-chain performance, developmental trajectory, and competitive positioning in the modern digital asset landscape as of December 4, 2025. Tokenomics: Scarcity Meets Yield Ethereum's tokenomics present a compelling narrative of engineered scarcity. The network operates under a Proof-of-Stake (PoS) consensus mechanism, which has fundamentally altered its supply dynamics. Issuance remains relatively low, with an annualized inflation rate reported around 0.35%. This low issuance is routinely offset by the deflationary pressure of EIP-1559, which permanently burns a portion of all transaction fees. In periods of high network utilization, this mechanism often renders ETH net-deflationary, creating a powerful long-term scarcity narrative that is attractive to value investors. Staking is a cornerstone of the current value proposition, turning ETH into a yield-bearing asset. The nominal staking yield is currently around 3.08%, though this varies by platform and is often quoted in a range of 3% to 4.8% APY. The real (inflation-adjusted) yield is a crucial metric, currently estimated at 2.73%. With approximately 28% to 31% of the total ETH supply actively staked representing 35 to 37 million ETH the network is highly secured and institutional adoption, particularly via ETFs, is driving significant accumulation, further cementing demand away from circulating supply. Vesting schedules are non-existent for the native asset; however, staked ETH has withdrawal queues that manage the exit flow, although in-queue volume signaling strong commitment has recently surpassed exit volume. On-Chain Metrics: Infrastructure Dominance in Action Ethereum’s on-chain metrics affirm its role as the dominant settlement layer. DeFi Total Value Locked (TVL) remains a key indicator of utility and trust, with ETH DeFi TVL surpassing $119 billion in Q3 2025, representing over 49% of the entire sector. This signals robust, deep liquidity and sustained economic activity despite the proliferation of alternative Layer 1s. Network usage remains high, with daily transaction volumes averaging around 1.65 million transactions as of Q1 2025. Active wallets reached a record 127 million in March 2025, marking a 22% year-over-year increase, demonstrating broad user adoption across the ecosystem. Crucially, the average cost of interaction has significantly decreased due to Layer 2 scaling, with average gas fees dropping to approximately 3.78 per transaction in 2025. This indicates a successful strategy where the L1 focuses on security and data availability, while execution is offloaded to L2s, a model confirmed by the significant bridged TVL$ figures. Ecosystem & Roadmap: A Focus on Data Availability The roadmap post-Merge has clearly shifted toward scalability via a modular architecture. The key phases The Surge, The Verge, The Purge, and The Splurge are being executed in parallel rather than strictly sequentially. The Pectra upgrade in mid-2025 provided a visible boost to network usage by making the network more efficient, particularly for Layer 2s. The next major milestone is the anticipated Fusaka release, which will incorporate Peer Data Availability Sampling (PeerDAS) and increase block data capacity. This focus on data availability is designed to radically lower costs and increase throughput for rollups, solidifying Ethereum's foundation for L2 activity. Developer activity remains robust, with Ethereum hosting 31,869 active developers as of Q3 2025, attracting over 16,000 new contributors that year. This consistent developer engagement underpins the continuous evolution required for a network intending to be the "core of DeFi and Web3". Competitive Landscape: Security Premium vs. Speed Ethereum maintains its fundamental leadership based on security and decentralization, evidenced by its commanding DeFi TVL share (over 52% as of April 2025). While competitors like Solana offer superior raw transaction speed and lower native fees, they often face trade-offs in decentralization and security, making ETH the preferred settlement layer for high-value and Real World Asset (RWA) tokenization. Solana holds a strong position but its staking yields rely on significantly higher inflation compared to Ethereum's deflationary bias. Avalanche leverages its subnet architecture for specialized applications but holds a much smaller TVL share, around 1.34 billion to 1.5 billion. The overall thesis remains that L2 adoption reinforces ETH demand, as L2s rely on Ethereum's mainnet as their ultimate security and settlement base, regardless of the fee structure on the L2 itself. Verdict Conclusion Ethereum (ETH) presents a robust investment thesis anchored in its established network effect, structural scarcity, and the transition to a yield-bearing asset. The tokenomics, driven by low issuance and the deflationary burn mechanism of EIP-1559, create a powerful narrative of engineered scarcity, especially during periods of high network usage. The significant portion of ETH secured through Proof-of-Stake (approximately 28-31% of supply) not only ensures network security but also provides a tangible, real yield for holders, thereby creating strong holding incentives and draining supply from the accessible market. Furthermore, its dominance as the primary settlement layer for Decentralized Finance (DeFi) and ongoing Layer-2 scaling solutions solidifies its infrastructure advantage. Long-Term Verdict: Fairly Valued to Mildly Undervalued. While the valuation reflects its market dominance, the potential for sustained institutional accumulation via ETFs and further utility from scaling advancements suggests that current pricing has not fully incorporated future demand elasticity. Biggest Growth Catalysts: Continued institutional adoption (e.g., ETF flows), successful execution of future protocol upgrades enhancing scalability, and further deepening of DeFi/Real-World Asset (RWA) integration. Biggest Risks: Regulatory headwinds concerning decentralized finance or staking, potential major protocol bugs, and competition from alternative Layer-1/Layer-2 ecosystems successfully capturing significant market share. *** Disclaimer: This analysis is for informational and educational purposes only and does not constitute financial advice. Investment decisions should be made after thorough personal research and consultation with a qualified financial advisor.