How layer 1 blockchains are leading the 2024 bull run

What makes Layer 1 blockchains the centerpiece of the current bull run and can they prove their usefulness beyond speculation?

Tier 1s reach $2.8 trillion

Layer 1 blockchains have emerged as the focal point of the ongoing crypto bull run. According to data from CoinGecko, the value of these underlying platforms has increased by a staggering 7,000% since January 2024.

This milestone comes on the heels of Donald Trump’s election victory, which appears to have reignited excitement in the crypto space.

As of November 29, L1 blockchains collectively have a market cap exceeding $2.8 trillion. Bitcoin (BTC), the dominant L1, accounts for approximately 70% of this market share. Trading at $98,300, BTC recently reached its all-time high of $99,600 on November 22.

Ethereum (ETH), often hailed as the backbone of decentralized applications, has also made significant gains. ETH is trading at $3,630, up over 34%.

Other L1 platforms are also continuing the upward wave. Solana (SOL), a major competitor to Ethereum, hit an all-time high of $263.83 on November 23 and then retreated slightly to $244, a 40% monthly gain.

Cardano (ADA) surprised the market with an impressive 200% increase last month and is currently trading at $1.09.

Emerging platforms such as Hedera (HBAR) and Mantra (OM) also performed outstandingly, gaining 220% and 138% respectively.

The mantra was particularly striking; It is up over 6,000% since January. After rising as high as $4.45 on November 18, it has fallen 19.3% and is currently trading at $3.54.

In contrast, Binance Coin (BNB), another major L1 platform, has lagged behind its peers. Despite trading at $658, it has gained only a modest 10% in the last 30 days, a notable underperformer in this rally.

Are these gains a reflection of real growth in blockchain adoption and use, or are they primarily speculative? Let’s go deeper.

Ethereum’s TVL leadership

To measure the performance of L1 blockchains beyond pure price action, it is important to consider their total value locked.

Essentially, total value locked (TVL) serves as a barometer of trust and activity in a blockchain ecosystem.

High TVL generally indicates strong adoption of DeFi applications such as lending, borrowing, and staking. Low TVL may indicate decreased usage or decreased interest.

Ethereum remains the undisputed leader in this space and has a TVL of over $70 billion as of November 29. This is an impressive 44% increase from $47.5 billion on November 5th.

ETH 3-month TVL chart | Source: DeFi LIama

A significant portion of Ethereum’s growth is due to Lido (LDO), Ethereum’s leading liquid staking platform, which currently accounts for approximately $35 billion of the network’s TVL.

Liquid staking provides greater participation in DeFi activities by allowing users to stake their ETH while maintaining liquidity through derivative tokens.

Solana has also made notable progress, with its TVL increasing by over 50% to $9.17 billion, coming tantalizingly close to its all-time high of $10 billion, last achieved in November 2021.

LEFT 3-month TVL chart | Source: DeFi LIama

In contrast, Binance Smart Chain (BSC) saw more modest growth. Its TVL has increased by 17% in the last 30 days to $5.57 billion.

However, this figure is still well below the November 2021 peak of $22 billion.

BNB 3-month TVL chart | Source: DeFi LIama

Meanwhile, Cardano reached a milestone as its TVL reached an all-time high of approximately $619 million. This marks a dramatic improvement from the sub-$1 million TVL levels in January 2022.

ADA lifetime TVL chart | Source: DeFi LIama Fee race: Who wins?

Blockchain fees have long been a vital metric for assessing the effectiveness, utility and adoption of L1 platforms. These represent not only the cost users are willing to pay to make transactions, but also the demand for block space and the overall health of the ecosystem.

During the 2020 and 2021 bull runs, Ethereum dominated this space. Fee revenue highlighted its position as the leading blockchain for dApps and DeFi.

In late 2020, Ethereum consistently generated over $1 million in daily fees, far outpacing rivals like Tron (TRX), which only manages a few thousand dollars per day. At the time, Binance Smart Chain and Solana had not yet emerged as key players in this metric.

By 2021, Ethereum’s fee revenue averaged between $20 million and $50 million per day in the second half of the year.

Meanwhile, BSC generated $3 million to $10 million in revenue from daily fees, while Tron generated a more modest $300,000 to $800,000. Still in its infancy as a competitor, Solana collected a relatively small daily fee of $100,000 to $200,000.

Let’s fast forward to November 2024; Solana consistently outperformed Ethereum in daily fees throughout the month; This was a huge milestone that reflected its growing adoption and increased network activity.

As of November 28:

Solana recorded $7.4 million in daily fees. Ethereum was hovering around $6.19 million. Tron ranked third with $2 million. BSC remains behind $680,000.

Ethereum’s relative decline in fee dominance is perhaps the most revealing change. While it remains a powerhouse, several factors have contributed to its declining share of the fare market.

The increasing adoption of layer 2 and layer 3 scaling solutions has significantly reduced the fee burden on Ethereum’s mainnet. In addition, the decrease in interest from retail investors in recent months has further slowed down the activity.

High fees once justified by Ethereum’s unique DeFi ecosystem are now being bypassed as users seek alternatives that offer similar benefits at a fraction of the cost.

Current state of the DApp ecosystem

The DApp ecosystem serves as the ultimate proving ground for L1 platforms, showcasing their ability to drive activity and engage users.

By analyzing transaction volumes and key contributors, we can uncover what fuels these networks and how they accumulate. Data is as of November 29.

Ethereum: Dominates volume, not value

Ethereum remains the DeFi heavyweight, generating $175 billion in transaction volume across 4,844 dApps last month. Two prominent platforms, Uniswap (UNI) V3 and 1inch, account for the majority of this activity.

Uniswap V3 alone has processed $85 billion, solidifying its position as the cornerstone of liquidity provision and token swaps. Meanwhile, 1inch (1INCH) contributed $11 billion by attracting users with its efficient combination of multiple liquidity pools.

Data shows that Ethereum continues to appeal to institutional and high-net-worth users who value its reliability and deep liquidity.

However, with only 1.76 million unique active wallets available, it is clear that high fees and scalability limitations are driving smaller users towards L2 solutions or alternative L1 platforms.

Ethereum remains a “big money” ecosystem, but its retail appeal is waning as users look for more affordable options.

BNB Chain: Retail hub

BNB Chain processed $38.2 billion in volume from 5,555 dApps, cementing its reputation as a retail-friendly ecosystem.

With 2.41 million unique active wallets surpassing Ethereum, it is clear that BNB Chain is resonating with everyday users who prioritize low costs and ease of use.

PancakeSwap V2 is a standout performer with $11 billion in volume, accounting for almost 29% of the chain’s total. BNB Chain also recorded 14.73 million transactions last month; this highlighted its capacity for high-frequency, small-value interactions.

While these numbers are impressive, the average transaction size is much smaller than Ethereum’s, reflecting BNB Chain’s role as a hub for casual investors rather than institutional players.

Moreover, regulatory scrutiny and government investigations into Binance have also hindered its progress. To regain momentum, BNB Chain will need to attract higher value projects.

Solana: Increasing participation

Solana leads the way in raw activity, boasting 113.66 million unique active wallets and 594.7 million transactions last month.

These numbers far surpass its competitors in terms of pure attendance. However, the transaction volume of $8.6 billion shows that the average transaction value remains modest.

The biggest contributor to Solana’s volume is Pump.fun, a meme-focused platform; this platform is responsible for $3.1 billion, which is approximately 36% of the chain’s total. Solana’s focus on high-frequency, low-cost interactions makes it a hub for speculative and experimental dApps.

Despite impressive user engagement, Solana’s relatively low total transaction volume underscores its limited penetration into high-value DeFi markets. Despite this, its rapid growth means it is becoming the platform of choice for speculative, retail-friendly dApps.

Tron: The workhorse of stablecoin

Tron processed $5.45 billion in volume last month from 63,660 unique active wallets and 953,220 transactions. Although modest compared to Ethereum and BNB Chain, Tron’s strength comes from its expertise.

Tron, the blockchain of choice for USDT transactions, directly benefits from Tether’s massive daily transaction volumes.

This focus on stablecoin transfers has provided Tron with interest, but it also reveals a potential vulnerability. Without diversifying into areas such as gaming or broader DeFi applications, Tron risks being classified as a “stablecoin”.

Cardano: Slowly getting back on its feet

Cardano’s dApp ecosystem is still in its infancy, but it’s starting to show promise. With just 60 dApps, it generated $29 million in transaction volume from 40,250 unique active wallets last month.

While these numbers are modest compared to its peers, they reflect meaningful progress for a blockchain that has often been criticized for its slow pace of development. Cardano’s focus on security and sustainability may attract the attention of developers and users over time.

But Ethereum still has a long way to go before it can compete with platforms like BNB Chain or Solana. Its future success depends on expanding the dApp ecosystem and adapting to the evolving demands of the market.

The road ahead

The current bull market has brought L1 blockchains into the spotlight, revealing both their strengths and weaknesses.

Ethereum’s dominance in high-value transactions, Solana’s retail-focused activity, BNB Chain’s accessibility, Tron’s stablecoin expertise, and Cardano’s measured progress collectively indicate a dynamic and evolving ecosystem.

But the path forward will depend on how these platforms address key challenges. Scalability remains a critical issue, as does the ability to attract and retain developers while fending off intensifying competition.

As prices continue to rise and adoption expands, the real test for L1s will be maintaining this momentum. Proving their benefits beyond speculative cycles will be crucial in solidifying their place in the crypto space.

Whether this bull run signals the beginning of a transformative era or just another chapter in crypto’s unpredictable journey depends on how these platforms will adapt to meet the demands of an ever-growing global audience. The scene has been set but the story has not been written.

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