What is Ethereum?
Ethereum is a permissionless smart-contract platform and the largest settlement layer in crypto. Its native asset, ETH, is used to pay for transaction execution (gas), to secure the network via staking, and as collateral across most DeFi protocols. The majority of stablecoins, DEXs, lending markets and Layer-2 rollups settle back to Ethereum, which makes ETH both an asset and an infrastructure exposure.
Ethereum is best understood as shared infrastructure: most of DeFi rents blockspace from it, so ETH's health is also the market's health.
Why Ethereum matters for monitoring
ETH tends to lead the broader market. Liquidity rotations, risk-on/risk-off shifts and changes in DeFi activity usually show up in Ethereum metrics first — often before they appear in individual protocol tokens. Tracking ETH alongside the protocols you actually hold gives you a baseline to separate asset-specific moves from market-wide ones.
Metrics worth watching
- Price — the headline number, useful as a market-wide reference for relative performance of other assets.
- TVL (Ethereum L1) — capital deployed across DeFi on mainnet; a structural measure of how much value still settles directly on Ethereum vs. on L2s.
- Fees / Revenue — gas paid by users. Sustained fee growth signals real demand for blockspace; sharp drops often mark cooling activity.
- Market Cap & FDV — useful for relative valuation against other L1s and for gauging dilution risk over longer horizons.
How the network is structured
Layer 1
The base chain — referred to as mainnet — is where ETH is issued, staked and where final settlement happens. L1 metrics (price, fees, staking ratio) describe the security and demand for the underlying network itself.
Layer 2 rollups
Most user activity now happens on rollups (Arbitrum, Base, Optimism, …) that post proofs back to Ethereum. When reading TVL or fee data, it matters whether you look at L1 only or L1 + L2 — see the TVL guide for the distinction.
Setting up alerts (step by step)
- Add Ethereum to your dashboard from the asset picker.
- Enable the metrics that match your horizon — price and TVL for daily context, fees and revenue for structural trends.
- Pick thresholds per metric and timeframe (see suggested values below).
- Confirm your digest time so ETH shows up next to your other positions in the daily summary.
Reasonable starting thresholds
- Price (24h):
±5%to±10% - TVL (7d):
±10% - Fees (30d):
±20%
How to monitor Ethereum with TokenSignal
Add Ethereum to your dashboard, enable the metrics that match your time horizon, and let the daily digest surface ETH next to your other positions so you can read individual moves against the broader market.
Practical tip: keep ETH alerts a notch less sensitive than your protocol tokens — it moves often, and you mainly want it as context, not as noise.