The total value locked (TVL) in Ethereum Layer 2 scaling solutions has dipped to $38.64 billion, representing a notable 7-day decline of 10.38%. This movement in capital reflects broader market trends and shifting investor sentiment within the decentralized finance (DeFi) ecosystem. While short-term fluctuations are common, this decrease highlights the dynamic and sometimes volatile nature of crypto investments.
Beyond the headline TVL figure, a series of other significant developments are shaping the current digital asset landscape. These range from substantial institutional inflows into new exchange-traded funds (ETFs) to major corporate moves in the artificial intelligence space and important legal clarifications for creditors in high-profile bankruptcy cases.
Key Market Movements and Institutional Activity
Institutional interest in cryptocurrency continues to evolve, with new financial products attracting significant capital. The recently launched REX-Osprey SOL Spot ETF, for instance, reported a net inflow of $11.4 million on July 3rd, 2025, accompanied by a trading volume of $34.904 million. This follows its successful debut on July 2nd, which saw a trading volume of $33.914 million, indicating sustained investor interest in Solana-based investment vehicles.
Similarly, the US spot Ethereum ETF market demonstrated strong momentum, registering a single-day net inflow of $148.21 million. Such robust inflows into regulated financial products signify growing mainstream acceptance and provide a conduit for traditional investors to gain exposure to major cryptocurrencies like Ethereum without directly managing the underlying assets.
Whale Transactions and Market Sentiment
On-chain activity often provides insights into market sentiment. Recent analysis has identified significant movement by a large whale or institutional entity. Over the past three weeks, this entity has transferred a total of 81,182 ETH, valued at approximately $198 million at an average price of $2,443, to various centralized exchanges (CEXs). This sustained selling pressure, which included a further 13,000 ETH ($32.51 million) transferred in the last two days, can contribute to short-term price volatility. The entity's remaining holdings are now reported to be just 10,818 ETH.
Corporate Developments in AI and Blockchain
The intersection of artificial intelligence and blockchain technology is attracting attention from tech giants. Meta Platforms has made a strategic move by proposing to acquire a minority stake in the venture capital fund of NFDG, a firm recently co-founded by its new AI head, Nat Friedman, and Daniel Gross. This tender offer is structured to allow the fund's existing limited partners an opportunity for partial exit at current valuations, facilitating liquidity. This investment underscores Meta's continued commitment to advancing its capabilities in artificial intelligence and exploring synergistic opportunities with emerging technologies.
Concurrently, traditional financial institutions are deepening their exploration of blockchain applications. Japan's Minna Bank, the country's first digital-only bank and a subsidiary of the Fukuoka Financial Group, has announced a pilot program in collaboration with Fireblocks, Solana Japan, and TIS Inc. The initiative is focused on developing use cases for stablecoins and digital wallets to support everyday financial services and payments within Japan. This move signals a growing interest from established banking entities in leveraging blockchain technology to improve efficiency and user experience in financial services.
Ethereum's Dominance in Key Crypto Sectors
Amidst these developments, Ethereum's foundational role in the crypto economy remains firmly established. According to industry data shared by 1confirmation founder Nick Tomaino, Ethereum underpins over 80% of the real-world asset (RWA) tokenization market and 50% of the entire stablecoin market. This dominance suggests that trust in these critical sectors is, to a large extent, trust in the Ethereum network's security and reliability. The network continues to be the primary platform for building sophisticated decentralized applications and financial instruments.
Regulatory and Legal clarifications
The regulatory environment continues to impact market participants globally. New developments in the FTX bankruptcy case have clarified procedures for creditors from certain jurisdictions. The FTX estate has announced a 5% limitation on claims originating from 49 restricted jurisdictions where local laws either prohibit cryptocurrency transactions or do not allow the operation of distributors. Reports indicate that users from China represent a significant majority, accounting for 82% of the total affected claim value. The estate will be seeking further legal counsel to determine the feasibility of distributing any funds to these restricted regions.
In a separate incident highlighting the prevalence of fraud, the China Minmetals Corporation issued a public statement warning of不法行为 (illegal activities) where bad actors are impersonating the company and its subsidiaries. The company clarified that it has no affiliation with entities such as the "Minmetals Northern Marketing Center" or "Minmetals New Quality Energy Industry Group" and has never directly offered international gold or Bitcoin wealth management services through web pages or official WeChat accounts. This serves as a critical reminder for investors to exercise extreme caution and thoroughly verify the legitimacy of any investment opportunity.
👉 Explore advanced on-chain analytics tools
Frequently Asked Questions
What does Total Value Locked (TVL) mean?
TVL represents the total amount of assets deposited in a decentralized finance (DeFi) protocol or a set of protocols, like Ethereum Layer 2 networks. It is a key metric used to gauge the health, popularity, and amount of capital entrusted to these platforms.
Why did Ethereum Layer 2 TVL drop by 10%?
A weekly decline in TVL can be attributed to several factors, including broader market price decreases for crypto assets, users withdrawing funds from protocols, or a general shift in investor sentiment towards risk-off behavior, leading to capital moving out of DeFi ecosystems.
What is a spot cryptocurrency ETF?
A spot cryptocurrency ETF is an exchange-traded fund that holds the actual cryptocurrency it tracks. This allows investors to gain exposure to the price movement of assets like Ethereum or Solana through a traditional stock brokerage account without the need to directly purchase or store the coins.
How do whale movements affect the market?
Large transfers of assets by whales (entities holding vast amounts of crypto) to exchanges are often interpreted as potential preparation for selling. This can create downward pressure on the asset's price in the short term due to the anticipation of increased selling supply on the market.
What are real-world assets (RWA) in crypto?
RWAs involve the tokenization of traditional physical or financial assets, such as real estate, commodities, or bonds, on a blockchain. This process aims to unlock liquidity, enable fractional ownership, and streamline the trading of these assets using smart contracts.
What should I do if I'm in a region restricted by a crypto bankruptcy claim?
If you are a creditor from a restricted jurisdiction in a case like FTX, it is imperative to monitor official communications from the appointed debtors or administrators. They will provide guidance on the claims process and any specific procedures for affected users based on ongoing legal assessments.