Research Summary
The report provides a detailed analysis of the blockchain ecosystem, focusing on the total value locked (TVL) in the top Layer-1 (L1) and Layer-2 (L2) blockchains as of October 2023. Ethereum remains the dominant L1 blockchain, with Tron and Binance Smart Chain following. The report also notes the significant growth of Solana and the emergence of new L1 blockchains, while highlighting the disparity in TVL between the top L1 and L2 blockchains.
Key Takeaways
Ethereum’s Unwavering Dominance
- Ethereum Leads the Pack: With a TVL of $23.0 billion, Ethereum continues to be the most dominant L1 blockchain, holding a substantial 63.1% market share among the top 10 L1 blockchains.
- Market Share Metrics: Ethereum’s dominance is further emphasized by its capture of $28.0 billion in TVL, which is a significant portion of the $36.5 billion combined TVL of the top L1 blockchains as of October 2023.
Tron’s Ascension
- Tron’s Growth: Tron has seen remarkable growth, rising to become the second-largest L1 blockchain with a peak TVL of $7.9 billion, which is 21.6% of the top 10 L1 blockchains’ TVL.
- Yearly Progress: This represents a significant increase from its 12.3% market share at the beginning of the year, indicating a strong upward trajectory in its adoption and usage.
Proof-of-Stake’s Prevalence
- PoS Dominance: Among the top 10 L1 blockchains, 6 utilize the Proof-of-Stake (PoS) consensus mechanism, showcasing the growing preference for PoS over Proof of Work (PoW).
- Bitcoin’s Unique Position: Bitcoin remains the only blockchain in the top 10 that operates on the PoW mechanism, highlighting its unique position in the market.
Layer-1 vs. Layer-2 TVL Disparity
- L1’s Superior TVL: The top 10 L1 blockchains have a combined TVL that is 9.6 times greater than that of the top 10 L2 blockchains, underscoring the dominance of L1 solutions in the current market.
- Market Dynamics: This disparity points to the market’s current preference for L1 solutions and the potential growth opportunities for L2 solutions.
Emerging Blockchains and Market Trends
- New Entrants: Newcomers such as Aptos, SUI, Pulsechain, Tenet, SEI, and Celestia are mentioned, although they lag in TVL compared to established L1 blockchains.
- Market Evolution: The report indicates a dynamic and evolving blockchain landscape, with new technologies and platforms entering the market.
Actionable Insights
- Assess Ethereum’s Position: Given Ethereum’s significant market share, stakeholders should monitor its developments and consider its impact on the broader blockchain ecosystem.
- Explore Tron’s Expansion: Tron’s growth suggests potential areas for further exploration, such as its ecosystem offerings and strategic partnerships.
- Consider PoS Advantages: The prevalence of PoS among top blockchains may warrant investigation into the benefits and long-term sustainability of PoS systems.
- Analyze L2 Potential: The current TVL disparity between L1 and L2 blockchains suggests that there may be untapped potential in L2 solutions that could be explored for future scalability and efficiency improvements.
- Monitor New Blockchain Projects: Keeping an eye on emerging L1 blockchains could provide insights into innovative features and investment trends within the blockchain space.
