This week we continue with our Bear Market Tactics series and follow on from last week, where we dived into how to use an Ethereum block explorer to monitor and understand transactions.

This week we will continue using the Ethereum block explorer to see how we can monitor the network’s health.

As mentioned last week, using a blockchain explorer isn’t necessarily an activity or tool that you use specifically during bear markets; however, these market downturns provide us with an opportunity to understand and master them.

Assessing Network Health

Block explorers can also provide vital information to assess the network’s health, including hash rate and distribution, the number of transactions, transaction volume, the mempool size, the difficulty of the network and average confirmation times. Etherscan also allows us to assess the progress of the move to ETH 2.0, what contracts are using the most gas, the most popular tokens, and track NFT and DeFi activity.

Ethereum Transactions

There is a lot of transaction data you can assess when using Etherscan. As with Bitcoin, you want to see that the average number of daily transactions has been increasing over time.

Source: Etherscan

You can see that over time the number of transactions Ethereum has been settling has increased. There are times, especially during bull runs, when the transaction count tops out; however, what you are looking for is a gradual increase over time, and this bodes well for network adoption.

Another important metric to watch is Ethereum’s average confirmation time; similar to Bitcoin, this shows us that the network is operating as intended.

Source: Etherscan

If you look at the above chart, you will see that the average confirmation time for Ethereum has stayed relatively consistent throughout its history. This is a good indication that the network is operating as designed.

Etherscan also allows you to view transaction stats such as who are the top ETH senders and receivers and who has the highest transaction count, both sent and received.

Source: Etherscan

As one would generally expect, the top senders and receivers of ETH are exchanges. In the last week, this was Binance and FTX, two of the largest by exchange volume. However, not everyone is sending ETH and can also be sending Ethereum-based tokens; that is where general transaction (txn) comes in. Over the past week, these have been the Ethereum mining pool Ethermine and Opensea, the NFT exchange accounting for 1.64% and 5.69% of all Ethereum transactions, respectively. We can also take a more granular look at Ethereum-based tokens and see what are the most used.

Source: Etherscan

This handy tool allows us to see what tokens have been transferred and received by unique accounts. This can help us understand what tokens have been the most popular over the past week and have used Ethereum block space. If you look at the above image, you will notice that the three most transferred are two stablecoins, Tether USD and USD Coin, and Wrapped Ether. The first two make sense as there is a high demand for stablecoins on the Ethereum network, especially during bear markets. The Wrapped Ether could be used for several reasons; however, it is often used on other networks that have adopted the EVM standard and support ERC-20 tokens. Ether can not be used on other networks such as Avalanche or Fantom; however, a wrapped version can be supported by them and provides a layer of interoperability between them. While unique accounts can give us a clearer image of individuals interacting with tokens, it is also sometimes helpful to see what tokens are the most used by their raw transaction account.

Source: Etherscan

The above image shows us that there is high demand for Wrapped Ethereum and it accounts for the most transactions sent on the Ethereum network, just under a million transactions over a week. These were made by the 366 735 unique accounts identified in the previous image. We can see that after USDT and USDC, the number of individual transactions sharply declines. This gives us a much clearer idea of who is using the Ethereum network the most and for what reason.

Etherscan also allows us to have a closer look at miners, and while Ethereum is currently making a move to a Proof of Stake (PoS) network with the upgrade to ETH 2.0, until then, it is still important to monitor miner behaviour.

Ethereum Miners

Ethereum, just like Bitcoin, currently uses a Proof of Work (PoW) consensus. You can use Etherscan to monitor mining pools and the network hash rate. We expect that as we approach the move to ETH 2.0 that the hash rate will gradually decline as miners move to other chains and invest their capital elsewhere. Nevertheless, we can monitor their distribution similar to Bitcoin.

Source: Etherscan

While it may look like mining is super concentrated between four mining pools, you must remember that these pools are made up of a large variety of individual miners who contribute hash power to the pools to increase their chances of being rewarded. Most work on a pro-rata share basis minus the fee the pools charge. For most people, it can be a cost-effective and easy way to get into mining in the first place; however, it does lead to a degree of concentration risk. The mining company Ethermine currently dominates Ethereum mining; you will notice that they often account for a large number of Ethereum transactions as they distribute rewards to those who participate in their pool.

Etherscan also provides other informative dashboards that help us monitor various Ethereum layer two scaling solutions and their bridges, as well as the move to ETH2.0.

Ethereum Layer 2 Scaling Solutions

Due to the scalability and gas costs on Ethereum, we have seen the rise of various layer two scaling solutions in the Ethereum ecosystem. We have written extensively about this topic before. To get an overview of what they are and the different approaches, you can read the following articles: Layer 2 Scaling Solutions and Layer 2 Review.

Etherscan allows us to monitor the layer two bridges and bridges between other networks. These bridges are the way that people can transfer tokens between the Ethereum mainnet and the scaling solution or standalone chain.

Source: Etherscan

In total, there is almost $12 billion locked in Ethereum bridges. The value in these bridges is split between sidechains, layer two solutions and other EVM-compatible blockchains. You will notice that the largest TVL in an Ethereum bridge is the Polygon sidechain. Polygon, even though framed as an Ethereum layer two scaling solution, operates its own blockchain and consensus; nevertheless, it has found significant traction as a solution to Ethereum’s gas problems, and this is evident in the fact it accounts for almost 45% of the total value locked in all Ethereum bridges. The second most popular is Arbitrum, which uses optimistic rollups, and is considered more of a “true” scaling solution when compared with Polygon and has also found significant traction, accounting for 20% of the TVL in bridges.

Etherscan also tracks the deposits in individual chains over time; this helps you visualise the change in layer two and side chain popularity.

Source: Etherscan

In the above image, you can see how during the bull run period, the number of deposits was significantly higher than they are today. This is because during bull runs, Ethereum is used more, and therefore the cost of gas on Ethereum is much higher, so people look for ways to alleviate this issue. What is also important to note is the popularity of different scaling solutions. You can see that initially, Polygon was the primary way users were avoiding gas costs and accounted for the majority of deposits into an Ethereum bridge. However, we soon saw the rise of Avalanche and Fantom, the EVM-compatible blockchains that accounted for the lion’s share of deposits. You will also notice the use of Ronin; this was a blockchain that specifically focused on creating a scalable chain for the popular crypto game Axie Infinity.

What’s also interesting is that today Avalanche accounts for the majority of bridge deposits on the Ethereum network, staying somewhat consistent through 2022, showing the demand for alternative blockchains that offer scalability and cheap gas while being EVM-compatible. Nevertheless, Ethereum continues to move towards ETH 2.0, and we can monitor this progress and see the confidence users have by the number of individuals depositing and staking on the Beacon Chain.

ETH 2.0

The move to ETH 2.0 is a highly complex process; never before has a chain so core to the crypto ecosystem, with so much activity happening on top, transitioned from a PoW to a PoS network. This process, as one can imagine, is not something that can happen quickly without an extended testing period. The Beacon Chain plays a significant part in this testing as it allows the developers to monitor the staking process and creation of new blocks on the Proof of Stake network. To do this, people were required to move their tokens from the current PoW network to the Beacon Chain, a move that is irreversible. Therefore, the increasing number of ETH on the Beacon Chain shows people’s confidence in the move to ETH 2.0.

As it stands, over 13 million ETH have been deposited into the Beacon Chain contract, representing over 10% of the current ETH circulating supply. Staking ETH, however, can be complicated; therefore, we have seen the rise of staking services such as Lido. We can use Etherscan to see the breakdown of depositors and the distribution between staking services, exchanges and individuals.

You can see that the majority of deposits into the Beacon Chain contract are from staking pools. These generally will be individuals who have opted to reduce the complexity involved with staking and outsource it to professionals. A large portion is “others”, and these can be individuals or institutions staking their ETH. Following that are the exchanges that offer it to their clients as a service; they generally have large reserves sitting on their balance sheets and can put it to work and make a profit off it.

The last data point we will touch on in this guide is the Ethereum node tracker.

Ethereum Nodes

Using Etherscan, you can track the number of Ethereum nodes on the network. You can think of nodes as referees; they check the new entries of the blockchain ledger and decide whether miners or validators followed the rules of the game. If they are happy that the rules have been followed, they add these new entries to the ledger. Therefore, they play an integral part in the Ethereum ecosystem. Tracking nodes is crucial because you want to see their number going up over time.

Source: Etherscan

So, to begin with, the above stats come with a caveat; it seems as if there was an error in tracking the number of active nodes, and it has recently varied significantly. There could be any number of reasons for this, yet, it looks as if the tracker has been fixed, and we are seeing a number closer to what we would consider “normal”. It is also helpful to compare this number with other blockchains to understand the degree of the network’s decentralisation. Currently, Ethereum sits behind Bitcoin, which has over 14 000 nodes; however, when compared with other smart contract platforms, it sits firmly in front where its closest competitor is Solana, with 1 875.

There are a great number of handy stats that can be used to assess the health and use of the Ethereum network, and we encourage you to explore these in-depth; you never know what you may find.

Other Blockchain Explorers
We thought it appropriate to share a few other explorers so that you can dive into more than just Bitcoin and Ethereum:



Binance Smart Chain


NEAR Protocol


The ability to use a blockchain explorer is an important one in the world of blockchain. It allows you to track your transactions and understand more about the blockchain you are using. It can provide helpful information that allows you to assess the health of the network and ensure it is operating as designed.

If you have any questions or have trouble using the explorer, please feel free to reach out and ask us questions. We always look forward to chatting with our readers. Otherwise, please feel free to share this article if you know anyone who is interested in learning more about using a block explorer.

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This is not financial advice. All opinions expressed here are our own. We encourage investors to do their own research before making any investments.