In March, I published a model pricing ETH based on stablecoin TVL as a proxy for the network's security burden. The R² was 0.86 and the directional signal was clear — ETH was meaningfully underpriced relative to the value it was being asked to secure.
I kept building. Stablecoins are the largest and most stable component, but they are not the whole picture. DeFi TVL and RWA tokenization both create genuine security dependencies on Ethereum — capital that needs the chain to stay live and uncorrupted. Adding them to the model improves the fit and, more importantly, captures where the growth is actually coming from.
The updated model uses combined TVL across all three. R² is now 0.902. Model price: $3,217. Current Z-score: −0.97.
Why all three categories matter
The original thesis holds: Ethereum's security comes from staked ETH, and the more value sitting on the network, the stronger the incentive for that value to support ETH's price floor. Stablecoins are the clearest expression of this — institutional capital choosing Ethereum as settlement infrastructure.
DeFi TVL adds a different signal. A protocol locking billions in collateral on Ethereum needs the chain to remain live and uncorrupted. DeFi naturally inflates during risk-on periods and contracts during risk-off environments, which gives the model more sensitivity to the cycle than stablecoins alone provide.
RWA is the component that adds the most new information. Tokenized treasuries, money market funds, and private credit are being issued on Ethereum at an accelerating pace. This capital has a longer time horizon and less price sensitivity than yield farming ever did. It also doesn't show up in stablecoin supply — so a model that ignores it is increasingly understating the economic activity anchoring ETH's security budget.
What $230 billion actually looks like
Stablecoins: $167 billion, near an all-time high. USDT and USDC now make up over 80% of supply. USDC's growing share is a direct proxy for institutional capital — Circle's client list includes BlackRock, JPMorgan, and Fidelity. The composition of who's bringing dollars onto Ethereum has changed materially since 2021.
DeFi TVL: $46 billion. Peaked above $100 billion in late 2021, collapsed, and has been recovering since. The composition has matured — lending protocols, liquid staking, and DEX infrastructure now dominate where speculative farms once did.
RWA TVL: $17 billion, growing faster than either of the other two components. Near zero two years ago. The growth curve is steep and still early.
Combined: $230 billion secured on Ethereum. The all-time high for total secured was $271 billion in late 2025. We're approaching that level again — while ETH's price remains well below its own prior peaks.
The model, and what it's saying
Same methodology as before: fit historical ETH price against the 30-day moving average of the total secured / market cap ratio, derive a model price, track the deviation over time.
R²: 0.902, up from 0.86 on the stablecoins-only version. The improvement makes intuitive sense — it is capturing a more complete picture of the economic activity that Ethereum's security is being asked to protect.
Current model price: $3,217. Spot: $2,328. Z-score: −0.97. Roughly one standard deviation below model. The last time this reading was sustained at this level was mid-2025, and before then, late 2022.
The secured / market cap ratio is now approaching 0.95 — near parity between what Ethereum is securing and what it's worth. Historically this ratio has acted as a ceiling. When it gets this high, either ETH price recovers or TVL growth stalls. We're approaching it from an unusual direction: not because TVL is running hot, but because ETH price has lagged long enough for the ratio to climb from below.
What I'm watching
The model breaks if Ethereum loses TVL share across all three categories. Tron competes on USDT volume. Solana is making a push in stablecoins and DeFi. That erosion isn't happening at scale yet, but it's worth tracking.
RWA is the variable with the most leverage in either direction. If Ethereum captures the majority of the tokenized asset market over the next few years, the model price could be substantially higher than today even at flat stablecoin levels. If that flow goes elsewhere, the RWA component deflates before it gets large enough to matter.
Right now: stablecoin supply is near an all-time high, RWA accelerating, DeFi is reflexive to the price of ETH, and ETH priced as though the narrative is broken.
The model has made higher lows since 2023. Price hasn't followed yet.