Ethereum Ecosystem — July 3, 2026

Top Story

Ethereum Institutional and EthLabs Launch Amid Historic Ecosystem Restructuring

The Ethereum ecosystem is undergoing its most significant organizational shift in years, with two independent nonprofits officially launching to fill gaps left by the Ethereum Foundation's strategic narrowing. Ethereum Institutional debuted on July 1 as a dedicated organization targeting enterprise adoption, bank partnerships, and institutional use cases around tokenization and stablecoins. The initiative has secured backing from Standard Chartered and top Ethereum ecosystem leaders, positioning itself as a neutral gateway between enterprises and Ethereum infrastructure.

Alongside this launch, EthLabs emerged to handle research, development, and ecosystem functions previously managed by the Foundation's business development team. This separation reflects what the Ethereum Foundation describes as its "philosophy of subtraction"—a deliberate shift to focus exclusively on stewarding the core protocol while delegating community-facing and institutional engagement to specialized independent organizations.

The timing underscores a broader transition period for Ethereum leadership. The restructuring comes as the Foundation executes planned organizational changes, with community members noting concerns over transparency and communication around the Foundation's evolving role. However, the emergence of purpose-built organizations like Ethereum Institutional and EthLabs suggests the ecosystem is adapting by distributing responsibility more widely rather than concentrating it in a single entity.

Protocol & Development

• Glamsterdam Upgrade Enters Final Development Sprint: Ethereum's next major protocol upgrade, Glamsterdam, has entered the final development phase according to the official roadmap. The upgrade is designed to redefine Ethereum's block production and execution layers, representing a significant step forward in the network's scaling and efficiency roadmap. This marks a critical milestone in the protocol's evolution toward the next generation of performance improvements.

• Ethereum Foundation Issues Policy Guidance for Governments and Institutions: The Ethereum Foundation released a comprehensive policy guide on July 1 designed to help policymakers understand Ethereum's decentralized architecture. The guidance distinguishes between truly decentralized public blockchains and networks that remain controlled by foundations or corporations, emphasizing that governance structures will determine long-term suitability for public sector adoption. This positions Ethereum as the preferred model for institutional and government use cases.

DeFi Pulse

• Total Ethereum DeFi TVL: DefiLlama data shows Ethereum remains the dominant DeFi platform, though Layer 2 concentration continues to increase.

• Layer 2 Consolidation Accelerates: Base and Arbitrum alone account for over 80% of Layer 2 DeFi TVL, according to DefiLlama. Smaller chains including Linea, World Chain, Starknet, and Mantle have experienced significant TVL declines over the past six months, with Linea's bridge deposits falling 60% from $976 million in November 2025 to $367 million by May 2026. This consolidation reflects a market-wide reassessment of L2 viability and user preference for established platforms with deeper liquidity.

Layer 2 & Scaling

• Base Dominance in Institutional Rollups: Base, built on the OP Stack as an optimistic rollup, continues to capture significant institutional and retail users. As one of the two pillars of L2 TVL alongside Arbitrum, Base has benefited from developer network effects and Coinbase's institutional backing, making it the preferred choice for enterprise users entering Ethereum.

• Arbitrum and Optimism Maintain L2 Leadership: The duopoly of Arbitrum and Optimism (via Base) reflects market preference for mature, battle-tested rollup architectures. Both platforms leverage the proven optimistic rollup model with fraud proof mechanisms, offering significantly improved throughput while maintaining Ethereum security guarantees.

What to Watch

• Glamsterdam Upgrade Development Progress: Monitor updates on Glamsterdam's path from final development to testnet deployment, expected to shape Ethereum's block production capabilities in late 2026.

• Ethereum Institutional Adoption Metrics: Track enterprise partnerships and institutional capital flowing through Ethereum Institutional to gauge the success of the new nonprofit model in capturing Wall Street engagement.

• L2 Consolidation Trend: Watch for further bridge deposit shifts and TVL movements among smaller Layer 2s; the 80% Base + Arbitrum concentration may continue rising or stabilize as market dynamics clarify.

• Foundation Restructuring Impact: Monitor communication from the Ethereum Foundation on its narrowed mandate and how ecosystem functions migrate to EthLabs and other independent organizations.

Reader Action Items

1. If You Support Ethereum Institutional Adoption: Review the Foundation's new policy guide at coindesk.com/policy and consider engaging with Ethereum Institutional if your organization handles tokenization, stablecoins, or enterprise blockchain use cases.

2. If You Deploy on Layer 2: Evaluate your rollup strategy in light of TVL consolidation—Base and Arbitrum offer superior liquidity and lower execution risk; smaller chains may require stronger community or technical differentiation to justify migration costs.

3. Stay Informed on Glamsterdam: Bookmark the official Ethereum roadmap (ethereum.org) and follow core dev updates for testnet announcements and security audit results as the upgrade progresses through final stages.

Note on Data Freshness: This article covers developments published or updated between July 1–3, 2026. DeFi TVL figures are current as of publication but subject to real-time fluctuation; consult DefiLlama directly for live metrics.

3 sources

coindesk.com

coindesk.com

coindesk.com

coindesk.com

coindesk.com

coindesk.com