This article analyzes the major changes in the main L1 blockchains from 2021 to the present, exploring technological innovations, market performance, and their position in the cryptocurrency community, and evaluating the fundamental factors behind their value growth. At the same time, the article also mentions some promising new projects. This article is sourced from THOR HARTVIGSEN and translated and compiled by HuoXing Finance.
(Table of Contents:
Didn’t buy Solana and regret it? Which old public chains still have potential?
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(Background supplement:
The paralysis of multiple public chains, how long can Ordinals’ frenzy last?
)
Table of Contents
Solana (SOL)
Avalanche (AVAX)
Near (NEAR)
Injective (INJ)
Polygon (MATIC)
THORChain (RUNE)
Fantom (FTM)
Cardano (ADA)
In the last bull market, Alt-L1s such as Solana, Avalanche, Fantom, and Polygon outperformed other companies in terms of price appreciation and venture capital investment. Some people may think that this dominant position in infrastructure is a characteristic of an industry that is still in its early stages.
So, what major changes have occurred from 2021 to the present? Looking at the price performance below, it seems that the situation has not changed.
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This raises a question: Is the outstanding performance of the current price performance related to improvements in fundamentals or is it simply the same old narrative script we saw in the previous cycle? This report analyzes the top 8 performing alt-L1s to try to answer this question.
Solana stands out from most L1s by using parallel processing to verify and execute transactions, eliminating the need for additional scaling layers. This makes it a cost-effective and capital-efficient platform for user interaction.
In terms of user activity, Solana is currently one of the most popular blockchains in the field, mainly due to the airdrop of tokens to early users by emerging protocols. People are also increasingly interested in utilizing the functionality of the Solana Virtual Machine, with projects like Eclipse using it to extend the capabilities of Ethereum beyond its current state. With the decreasing inflation rate of SOL, the native token, the issuance of native tokens is becoming lower and lower, which is a catalyst for Solana.
Here are some test versions that may perform well if the ecosystem continues to grow:
Jito (JTO – $3.0b FDV)
Solana’s leading Liquid Stake protocol has gained popularity in the cryptocurrency community after a generous airdrop to over 10,000 users.
Bonk (BONK – $1.4b FDV)
Bonk has a huge market value and is the most popular community token on the Solana blockchain. Its price skyrocketed by about 400% in the past 30 days, and more and more people are using the network and participating in it.
marginfi (MRGN – N/A)
A decentralized lending protocol with a TVL of over $240 million, currently rewarding users with points for interacting with its platform. These points will be used for airdrops of upcoming tokens to users.
If you are interested in the potential impact of airdrops, you can take a look at the recently released calculator.
Avalanche is a fast and scalable platform that allows developers to build custom blockchains or use existing subnets (subdivisions of a blockchain). The Avalanche mainnet actively uses three blockchains.
Most of us are familiar with the C-Chain because that’s where DeFi applications reside. The Avalanche mainnet itself is a special subnet. So far, several projects have deployed their own subnets on the system, and some notable projects are:
Beam (Gaming)
– Aims to shape the future of gaming through a community-driven approach and provide a solid platform for developers.
UPTN (web3)
– Pilot in South Korea, integrating blockchain technology into real-world businesses.
DFK (Gaming)
– The home of gameFi platforms and the DeFi kingdom.
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Due to the breakout of the long-term price range and a significant increase in TVL, “red coins and gud coins” have recently gained attention. But it is important to note that these gains are due to the appreciation of AVAX rather than additional token inflows.
The optimistic outlook for Avalanche is that the number of subnets deployed by platforms with specific application requirements continues to increase, and these platforms choose the subnet instead of one of the L2 solutions currently available on the market.
If the ecosystem continues to trend upwards, some test versions may perform well:
Trader Joe (JOE – $307.81m FDV)
The top DEX on the chain and the flagship product in the ecosystem have been actively rolling out updates and generating significant fees amidst increased trading volume.
Benqi (QI – $182.74m FDV)
Benqi offers a range of DeFi products such as lending, liquidity staking, and validator leasing. With a significant increase in TVL in the liquidity staking sector, the price of QI has risen by about 250% in the past two weeks.
Near is a blockchain that also refers to itself as an operating system, providing interoperability across any blockchain. Their core focus is on scalability achieved through sharding, dividing the network into smaller parts to process transactions more efficiently while maintaining speed, low costs, and decentralization.
Through a partnership with EigenLayer, Near is soon to launch “Fast Finality Layer” which will provide faster and cheaper transactions for Ethereum aggregation. The testnet is said to launch in Q1 2024. Additionally, real-time market data provider Pyth has entered Near with its oracle solution, allowing on-chain applications to easily access equity, commodities, and market data.
If the ecosystem continues to grow, some test versions may perform well:
Meta Pool (META – $2.27m FDV)
An ecosystem based on multi-chain liquidity with a suite of products offering LST, liquidity provisioning, launchpad, and bonds. Meta Pool has a cumulative TVL of $42.56 million, with 97% of the value coming from Near.
Ref Finance (REF – $9.39m FDV)
Ref has a TVL of $16.87 million and is the largest AMM on Near, where users can trade spot or perpetual contracts at lower transaction costs.
Injective, built on the Cosmos SDK, is a blockchain aimed at financial applications, offering fast transaction processing, low gas fees, and strong interoperability with various other chains such as Ethereum and Solana.
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The project is well-funded and supported by numerous prominent investors in the tech industry and the cryptocurrency field. Despite its high market value, there hasn’t been much on-chain activity apart from staking, but significant onboarding efforts are underway to invite developers to join the platform.
Earlier this year, a $150 million ecosystem fund was established to accelerate the adoption of interoperable infrastructure and DeFi. While daily trading volume has been on the rise in recent months, $5-7 million is not much for a chain with a market cap of $3 billion.
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Polygon (PoS) is an EVM-compatible sidechain designed for low-cost, fast transactions.
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Polygon DEX trading volume has seen a slight increase in the past few months, but the growth rate is different from chains like Solana or Avalanche.
In a blog post released in July this year, Polygon announced the 2.0 upgrade. Polygon is building a modular stack that includes “Supernets” (application-specific chains), privacy aggregators, and recently launched components like Polygon zkEVM.
The general highlights of this update are:
Redesigned protocol architecture
Reshaping of the MATIC token to POL
Ecosystem benefits:
Enhanced security
Improved scalability
These could be catalysts for the MATIC token in 2024. If MATIC rebounds, some test versions worth watching are:
Quickswap (QUICK – $45.02m FDV)
Deployed on multiple Polygon layers, with most of its $1.2565 billion TVL residing on the PoS chain, where users can engage with a wide range of products and services beyond DeFi. QuickSwap has generated $10.3 million in fees this year and a cumulative trading volume of approximately $11.1 billion.
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THORChain functions as an independent L1 cross-chain AMM, allowing users to exchange native assets across multiple chains without the need for wrapping or pegging.
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From the trading volume indicator, it is evident that the underlying technology of this protocol is being effectively utilized for on-chain transactions. THORChain’s endorsed lending protocol is actively burning a significant portion of RUNE supply. Its lending model allows users to borrow BTC or ETH with various collateral options at zero interest and without liquidation. However, these loans require higher minimum collateral ratios ranging from 200% to 500%, depending on market conditions.
If the ecosystem continues to grow, some test versions may perform well:
THORSwap (THOR – $129.54m FDV)
A DEX aggregator that offers token swaps across 10 chains and over 5,000 assets with a single click, providing 75% of the revenue to token stakers. The protocol currently conducts token burning monthly based on trading volume and recently reached a TVL of $1 billion.
Maya (CACAO – $73.03m FDV)
A THORChain fork and cross-chain DEX aiming to directly compete with centralized exchanges by providing deep liquidity and low fees while reducing the risks associated with such entities.
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Fantom is a high-performance blockchain from the previous cycle that hosts one of the largest DeFi ecosystems. Since the collapse of Terra, the untethering of Tomb, and the exploit of the multi-chain bridge, Fantom’s activity has significantly decreased.
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Despite going through a tough period, the team is actively planning to launch a brand new blockchain technology soon to remain competitive. With the use of a new virtual machine and improved storage capabilities, their upcoming iteration called “Sonic” is expected to achieve over 2000 TPS. The upgrade is expected to be launched in spring 2024.
If the ecosystem continues to grow, here are some test versions that may perform well:
SpookySwap (BOO – $11.33m FDV)
The leading DEX on Fantom, offering native and cross-chain token swaps and providing 75% of the swap fees to token stakers.
BeethovenX (BEETS – $4.43m FDV)
Derived from Balancer V2, BeethovenX is an AMM that offers users the best swap rates, minimal slippage, and stable earning opportunities. Token holders will receive a certain percentage of the exchange fees generated by the platform.
WigoSwap (WIGO – $14.12m)
Wigo offers a range of products from trading to gaming and aims to be at the core of the Fantom ecosystem.
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Cardano is a PoS blockchain that emerged in the previous cycle and is popular among retail investors. Although Cardano is not known for its DeFi scene, its loyal community has led to the growth of on-chain value and activity, which is impressive. To further increase adoption and network efficiency, the pain points around scalability are being addressed through the L2 solution called “Hydra,” released earlier this year. Hydra is defined as a homomorphic L2 for off-chain processing, with each Hydra “head” capable of handling 1,000 TPS.
Some Cardano test versions are:
Indigo (INDY – $114.91m FDV)
Cardano’s preferred CDP platform allows users to create fully collateralized synthetic assets such as BTC, ETH, and USD.
Minswap (MIN – $174.28m FDV)
Despite a security incident earlier this year that affected TVL and trading volume, community-centered protocol Minswap still remains at the forefront of DEXes in the ecosystem.
Here is a summary of each L1 indicator mentioned in today’s research report.
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In conclusion, it is evident that some L1s have seen growth in fundamental indicators such as daily active users, TVL, and trading volume. However, it is more apparent that many of these tokens’ recent price appreciation far exceeds the underlying growth. We believe that these tokens should be seen more as narrative trades rather than long-term fundamental investments.
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Related Reports:
Complete Compilation of Public Chain Wallets, Query Websites, Launchpads, and more
Can “Mingwen” withstand the limit of trading volume? Can it support other public chains besides Bitcoin?
Privacy Public Chain Hotspot in the Bull Market: What is Fully Homomorphic Encryption (FHE)? What is the difference from ZK?
Tags:
Avalanche
Cardano
Fantom
Injective
L1
Near
Polygon
Solana