Layer 1 Networks: Key Trends and Metrics

Layer1 networks are the leading blockchains, including Bitcoin (BTC), Ethereum (ETH), BNB Smart Chain (BNB), Solana (SOL), and others. They are classified as layer one because they serve as the leading networks in their ecosystem. In addition, there are off-chain solutions, such as Layer 2 blockchains, built on top of the main ones. They scale the network.

Layer 1 protocol processes and finalizes transactions on the blockchain. They also always have a native token used to pay transaction fees.

Coinmarketcap currently tracks 124 tokens of Layer1 networks, not including those that have yet to undergo a Token Generation Event (TGE). The dominance map of Layer1 networks has changed dramatically since the beginning of the year. Next, we look at the metrics of the largest L1s from Q1 to Q3: changes in the top L1s by total value locked (TVL) and their growth catalysts.

Throughout the year, Bitcoin's dominance in the capitalization of layer1 networks (FDV) grew steadily. At the beginning of the year, $BTC accounted for 60% of the FDV of Layer 1 (L1) networks, and by the end of the third quarter, its share had already exceeded 66%. As Bitcoin's influence grew, Ethereum's FDV share gradually declined, from 19% in Q1 to 15.5%.

There were also other changes in market shares:

• The dominance of the TON network increased from 0.81% to 1.45%, making it the fifth largest Layer1 network by fully diluted valuation (FDV).
• The SUI network's dominance increased from 0.52% to 0.83%, making it the eighth largest Layer1 network by FDV.
• The Filecoin project's share dropped from 0.92% to 0.38%.
• The Dymension project entered the top–20 in terms of TVL and now accounts for 0.09% of the total TVL.

SUI's Fully Diluted Valuation (FDV) fell 57.1% in the second quarter, but quickly recovered in the following quarter, rising 86.6%. This is probably due to the fact that Grayscale launched mutual funds for the $SUI token and Bittensor in mid-August, allowing the market price of $SUI to recover and rise.

The total market value of the 56 Layer1 networks is $1.87 trillion and the total fully diluted valuation (FDV) is $2.01 trillion. This means that $14 billion has yet to come into the market through new token releases.

In the third quarter, the active user (MAU) graph shows an increasing concentration in individual tier 1 (L1) networks, with Solana now accounting for 56% of the top 20 tier 1 (L1) networks. This surge was fuelled by the hype around the Fun.Pump project, which allows you to create your own meme token with a few keystrokes. However, this spike was short-lived and began to decline by the end of the third quarter.

Similarly, the number of active users on the TON network has increased significantly, from 0.39% at the beginning of the year to 7.31% so far. During this time, the TON blockchain has managed to leapfrog its competitors to become one of the top three Tier 1 blockchains in terms of active users (MAU).

The number of active users on Layer1 networks has grown from 57 million at the beginning of the year to 149 million today.

Key metrics:

• Solana: +79.9 million active users.
• TON: +10.6 million active users.
• Tron: +3.2 million active users.
• Aptos: +3 million active users.
• Ronin: +2.2 million active users.
• Ethereum: no change.
• Bitcoin: -3.7 million active users.
• BNB Chain: -4.2 million active users.

Bitcoin and TON showed significant growth in total value locked (TVL) in the third quarter of 2024. Bitcoin has halving since the beginning of the year and interest in its ecosystem has continued. Bitcoin's TVL fell 35.6% in the third quarter amid falling investor sentiment and the stock market crash in August 2024. In contrast, TON's TVL increased 6x from Q1 2024.

TVL Avalanche and Cardano fell by more than 40% in the second quarter. Interest in Cardano declined amid the growth of other blockchain networks, so the ecosystem experienced a decline in many metrics. The Avalanche network was of more interest to developers than investors, so its market performance is lower than technical indicators.

On the revenue side of Layer 1 (L1) networks, we have seen significant changes. The upgrade of the Ethereum Dencun network led to a decrease in the value of transactions across the entire ecosystem and Ethereum-based Layer 2 (L2) networks. At the end of August, Ethereum's revenue share fell below 5%.

Meanwhile, Tron's revenue from transactions and fees has been steadily increasing, recently averaging $6 million per day.

The Tron, Solana, Ethereum, and TON networks now generate 98% of all Layer1 network revenues.

Throughout the year, transaction activity on Layer1 networks remained relatively stable. However, there were two significant spikes in activity on the Aptos network, which resulted in some structural changes.

The TON and Tron networks have also seen an increase in daily transactions since the beginning of the year. In contrast, Avalanche's figures fell from 1.4 million to 180,000.

• TON now has 10 million more token holders than Bitcoin.
• The average transaction fee on Bitcoin has decreased from $12 to $1.5 since the beginning of the year.
• Ethereum has the largest core developer community, followed by Cosmos and Internet Computer.
• The number of contracts deployed on TON has surged from 8.1K to 2M per day now.
• By TPS, the top-3 chains tracked on Token Terminal are Internet Computer, Solana, and TON.