In a recent panel discussion at the LONGITUDE event organized by Cointelegraph, Alex Svanevik, CEO of data service Nansen, shared insightful perspectives on the current dynamics of Layer-1 (L1) blockchain networks. He noted that Ethereum’s dominance is undergoing a significant decline, marking the onset of an “open race” among various L1 platforms vying to become the preeminent Web3 ecosystem.
“If you’d asked me 3-4 years ago whether Ethereum would dominate crypto, I’d have said yes,” stated Svanevik. Despite Ethereum maintaining its status as the most popular L1 network with about $52 billion in total value locked (TVL), accounting for 51% of all cryptocurrency on blockchain networks, it has seen its influence wane since peaking at 96% in 2021.
Svanevik added, “It’s an open race between multiple L1s for becoming the go-to platform for trading and broader blockchain use.” Observations indicate that several smaller chains are experiencing rapid growth, with a handful emerging as frontrunners in this competitive space.
Focus on Solana’s Ascent
Among these newcomers, Solana has garnered significant attention. Known for its fast transaction speeds and lower fees compared to Ethereum, Solana is being touted as a likely candidate to ascend as the next leading chain in Web3. “Solana has overtaken Ethereum on most on-chain metrics — active addresses, transaction volume, even gas fees,” Svanevik pointed out. While Ethereum retains leadership in TVL and stablecoin issuance, Solana’s trajectory signals undeniable growth.
Nonetheless, the blockchain arena is crowded with hundreds of smaller L1s competing for relevance. As Vardan Khachatryan, chief legal officer of trading platform Fastex, articulated during the panel, not all chains gain sustainable traction; rather, they often rise to prominence during specific market trends driven by hype, new coins, or promotional airdrops.
This dynamic reality underscores a pivotal moment in blockchain innovation, highlighting a shift that could redefine the landscape of decentralized applications and their respective ecosystems.
As we move forward, it will be crucial to monitor these developments as blockchain technologies evolve. The competition not only fosters innovation but also enhances the overall robustness of decentralized platforms.
