Where Did the Over 120 Million ETH Go?

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The total circulating supply of Ethereum has surpassed 120 million ETH—specifically, around 120.23 million—and these digital assets are now scattered across the vast Web3 ecosystem. They reside in centralized exchanges, DeFi protocols, Layer 2 networks, cross-chain bridges, non-EVM blockchains, and even in wallets held by hackers who dare not move them for fear of exposure.

Every day, we're bombarded with headlines: "New all-time high for ETH bridged to L2!" or "CEX reserves hit a new low!" But beneath these surface-level metrics lies a more nuanced question: Where exactly is all this ETH going? How is it distributed across the ecosystem, and what does that tell us about user behavior and network health?

A passionate Ethereum analyst known as Eth Wave (@TrueWaveBreak) on X attempted to map out a partial snapshot of ETH distribution. While the analysis omits certain elements—like WETH holdings and ETH that has left the EVM ecosystem—it still offers valuable insight into how Ethereum is being used and stored today.

👉 Discover where smart investors are allocating their ETH in 2025.

Layer 2s Hold Less Than 2% of Total ETH Supply

One of the most surprising findings from the data is that all Layer 2 networks combined hold only about 1.66% of the total ETH supply, roughly 1.99 million ETH. At current prices, that’s approximately $3.22 billion—representing about 30.87% of the total value locked (TVL) across all L2s, which stands at $10.44 billion.

Despite the explosive growth and marketing hype surrounding L2s like Arbitrum, Optimism, and Base, their actual ETH footprint remains relatively small. The ranking of L2s by ETH holdings closely mirrors their TVL rankings on platforms like L2BEAT, with Arbitrum and OP Mainnet leading the pack.

Base, however, has seen rapid adoption—surprising many with its speed of growth. It now surpasses earlier entrants like zkSync Era and Starknet in terms of TVL, signaling strong institutional and retail interest driven by Coinbase’s backing and aggressive airdrop farming incentives.

Yet even with this momentum, the total amount of ETH locked across all L2s is only slightly more than what’s held in Bitfinex’s cold wallet—and just about half of Binance’s cold storage balance.

This suggests a critical insight: Layer 2s, despite lowering transaction costs and improving scalability, have not yet significantly displaced Ethereum mainnet usage. Why?

Two likely reasons:

  1. The number of users comfortable navigating multi-chain environments remains limited.
  2. Many core applications—especially in DeFi and NFTs—still operate primarily on Ethereum mainnet due to deeper liquidity and security.

In other words, while L2s are growing fast, they’re still playing a supporting role rather than replacing the main chain.

Centralized Exchanges Still Dominate ETH Liquidity

When it comes to liquidity, centralized exchanges (CEXs) remain the primary hubs for ETH movement. According to the analysis, identified exchange wallets hold over 7% of the total ETH supply. Once you factor in smaller or untracked exchanges, the real figure could approach or even exceed 10%.

This means tens of millions of ETH are readily available for trading at any given moment—confirming that CEXs continue to be central to market dynamics.

But here's an important nuance: while exchange reserves have been trending downward over time (often interpreted as bullish sentiment), the perception of "low liquidity" may be misleading. What we’re seeing might not be a lack of available ETH—but rather reduced trading activity, as holders adopt a wait-and-see approach amid market uncertainty.

Moreover, some major non-traditional players also hold significant ETH positions:

These entities act as institutional gateways, allowing traditional investors to gain exposure without self-custody—further reinforcing centralized platforms' role in shaping market behavior.

👉 See how top institutions are positioning their Ethereum holdings today.

Hacker-Held ETH: A Silent Overhang

Another often-overlooked segment is ETH held by hackers. The dataset includes known malicious actors such as those behind attacks on Polkadot’s multisig wallet, Mixin, and Gatecoin. Notably absent but equally impactful is the Lazarus Group, North Korea’s state-linked hacking collective, believed to control vast sums of stolen crypto.

While some stolen funds have been laundered through privacy tools like Tornado Cash or split across countless addresses, a significant portion remains dormant—untouchable due to blockchain transparency and law enforcement tracking.

These dormant wallets represent a hidden risk: if ever moved en masse, they could trigger market volatility or regulatory scrutiny. Their presence reminds us that on-chain security remains a fragile layer beneath the DeFi boom.

Staked ETH: Over a Quarter of the Supply

Perhaps the most transformative trend in Ethereum’s economy is staking. More than 25% of all ETH is now staked, securing the network under proof-of-stake consensus—and this number is expected to keep rising.

Within staked ETH:

Even centralized exchanges like Coinbase offer liquid staking tokens (e.g., cbETH), but their adoption lags far behind decentralized alternatives. Collectively, CEX staking solutions manage less than half the volume of top LSD protocols.

Liquid staking isn’t just about earning yield—it introduces complex financial layers:

While innovative, these mechanics introduce new risks. In a severe market downturn, widespread liquidations of LST-backed loans could strain on-chain liquidity—especially if exit paths are congested or confidence falters.

The Bigger Picture: Gaps in the Data

As Eth Wave acknowledges, this distribution map is incomplete. Key omissions include:

Future iterations aim to close these gaps, offering a fuller picture of where value truly resides.

Frequently Asked Questions (FAQ)

Q: What percentage of ETH is currently staked?
A: Over 25% of the total circulating supply is staked on Ethereum, contributing to network security via proof-of-stake.

Q: Why do L2s hold so little ETH despite high TVL?
A: Most L2 TVL comes from bridged ERC-20 tokens or synthetic assets—not native ETH. Users often bridge stablecoins or other tokens while keeping ETH on mainnet for security or gas purposes.

Q: Is it safe to stake ETH through centralized exchanges?
A: While convenient, CEX staking offers less decentralization and control compared to protocols like Lido or Rocket Pool. Always consider custody risks.

Q: How much ETH do hackers control?
A: Exact figures are hard to pin down due to obfuscation techniques, but known hacker wallets hold hundreds of thousands of ETH—with Lazarus Group alone suspected of holding over 300,000.

Q: Does low exchange supply mean bullish pressure?
A: Not necessarily. Low exchange balances can signal long-term holding sentiment, but reduced trading volume may reflect broader market apathy rather than accumulation.

Q: Can liquid staking destabilize Ethereum?
A: If highly leveraged positions collapse during a crisis, there could be cascading effects. However, ongoing protocol improvements aim to enhance resilience.

👉 Track real-time ETH flows and staking trends with advanced on-chain analytics.

Ethereum’s distribution reveals more than just numbers—it reflects trust, behavior, innovation, and risk. From staking dominance to silent hacker hoards, each segment tells a story about where value moves and why.

As the ecosystem evolves, so too will our understanding of ETH’s journey—from genesis to global digital infrastructure.