The crypto market has surged past $3T in total market capitalization, with smart-contract platforms leading the charge as risk appetite expands beyond Bitcoin. In particular, lean, cost-efficient blockchains have emerged as a key driver for onboarding users and boosting on-chain activity, as reflected in Figure 1.

• Solana soared 57% since the election, driven by memecoin-fueled retail interest and unprecedented DeFi activity, generating more revenue than Ethereum.

• Sui reached a new all-time high (ATH) near $4, also boosted by its gaming device pre-launch and consumer-friendly features.

• Aptos is gaining momentum for institutional-grade solutions like tokenization and payments, contributing to a recent price surge of 71%.

Figure 1 – Sector Price Performance Since Election Day

Source: Artemis, 21Shares

Given the proliferation of Layer 1s (L1s), it invites a closer examination of how the industry reached this point.

• Each L1 tackled the blockchain trilemma differently. While Bitcoin and Ethereum prioritized decentralization and security, later iterations focused on optimizing scalability.

• Ethereum’s first-mover advantage cemented the EVM as the standard for blockchain platforms, driving widespread adoption. However, its limitations spurred innovation, leading to the development of new virtual machines such as Solana’s SVM.

Despite these differences, each L1 plays a critical role in the on-chain ecosystem, tailored to unique use cases based on their architecture and features outlined in Figure 2 below.

Figure 2 – Technical Breakdown of Layer 1 Landscape

Source: Artemis, 21Shares

Below, we outline the unique strengths of each network, highlighting how they address various use cases in the order of their launch.

Ethereum – July 2015

The leading platform for decentralized applications (dApps) and a pioneer in smart-contract technology, as the first blockchain to introduce smart contracts.

• Ethereum laid the foundation for dApps and DeFi, commanding the highest liquidity with a Total Value Locked (TVL) of $60B.

• Its focus on decentralization and security, with more than 1M validators, makes it a trusted platform for tokenized government securities, totaling over $1.5B in assets.

• Ethereum hosts over 4,000 dApps, including prominent DeFi platforms like Uniswap and Aave, leveraging its unmatched network effects as the most widely adopted blockchain. While Layer 2 solutions enhance speed and efficiency, they have also introduced fragmentation, leading to reduced revenue.

Cardano – September 2017

The platform sets itself apart with a rigorous, research-driven approach to blockchain development.

• Introduced formal verification for smart contracts and enhanced Ethereum’s Proof-of-Stake (PoS) with Delegated Proof of Stake (DPoS), democratizing transaction validation.

• Collaborates with governments like Ethiopia to deploy Atala PRISM, enabling digital IDs that improve access to education and financial infrastructure in underserved regions. The network also promoted a transparent and efficient aid distribution system.

• Cardano’s growth has been hindered by slow development, a lack of EVM compatibility, and the absence of on-chain governance, resulting in a modest $456M TVL. Recent upgrades like the Chang Hard Fork foster a community-driven network, while the BitcoinOS integration will boost cross-chain utility by facilitating ADA-powered Bitcoin transactions.

Solana – March 2020

The network prioritized scalability powered by their innovative dual consensus model combining Proof of History (PoH) and PoS. With the ability to process nearly 3,000 transactions per second (TPS), Solana stands as one of the fastest blockchains available.

• This month, Solana’s DEX trading volume exceeded Ethereum’s by $40B, fueled by its efficient, low-cost blockchain and propelled by a dynamic DeFi ecosystem rich in retail-driven activity. This surge in trading volume has been a key driver behind the growth in Solana’s TVL, now reaching $8.3B.

• Solana powers decentralized physical infrastructure networks (DePIN) like Helium (broadband), Hivemapper (mapping), and Render (3D rendering), which demand high-speed, low-cost transactions at scale. Solana’s fast and efficient blockchain provides the necessary infrastructure for these applications to operate smoothly and cost-effectively.

• For Solana to deepen its integration with traditional finance—supported by PayPal’s PYUSD, which processes $30B, along with partnerships with Visa and Shopify—it must address ongoing network reliability issues, especially as its network experienced downtime once this year and multiple times over the past three years. The Firedancer validator client, capable of over 1M TPS on testnet, is positioned to reduce outages and enhance reliability, solidifying Solana’s role as a top solution.

Avalanche – September 2020

An EVM-compatible blockchain characterized by its subnet architecture, which enables customizable, permissioned networks connected to the Avalanche mainnet.

• Avalanche’s scalable subnet architecture enables customizable, permissioned networks with flexible gas fees, data privacy, and validator incentives. The Avalanche9000 upgrade enhances this with shared liquidity, lower validator costs, and full customizability, including geo-restrictions, making it ideal for tailored enterprise blockchain solutions.

• Avalanche’s Evergreen Subnets have attracted major TradFi players, including Franklin Templeton, which tokenized its $420M government money fund, as well as Citibank and Wellington Management exploring financial applications.

• Avalanche supports a wide range of industries, from Deloitte’s federal disaster reimbursement platform—designed to improve claim speed and transparency—to gaming projects like Shrapnel, which is built the GUNZ subnet. Its EVM compatibility and robust ecosystem pushed its TVL past $1B.

The Open Network (TON) – September 2021

A high-throughput blockchain designed for seamless user onboarding, TON aims to deliver a Web3 WeChat-like experience. Its strategic partnership with Telegram, which boasts 900M monthly active users, positions it as a key driver of mainstream blockchain adoption.

• TON’s Mini Apps act as a gateway to its on-chain ecosystem, leveraging projects like Hamster Kombat, which peaked at nearly 300M users, to drive retail adoption. However, its $300M TVL reflects a nascent financial ecosystem focused on simpler, retail-friendly use cases, leaving it comparatively underdeveloped in DeFi.

• Processing nearly 28M transactions this month, TON is strongly positioned to drive blockchain-based payments. Its recent USDT integration, surpassing $1B in supply within just seven months, further reinforces its potential in this space.

• Despite recent setbacks at Telegram, which operates independently from TON, the network’s growth this year underscores its strong potential. With scalable infrastructure and a vast addressable market, TON is well-positioned to onboard the next wave of users.

Aptos – October 2022

A high-performance blockchain leveraging the Move programming language, which was developed by Meta for their Diem project. Move prioritizes security and scalability, making it a strong contender for institutional use cases.

• Parallel processing enables sub-second settlement times and a theoretical throughput of 160K TPS, ensuring the performance needed for enterprise-grade applications.

• Aptos, led by ex-executives of Meta’s Diem project, is bringing institutions on-chain. Its credibility is bolstered by partnerships with TradFi giants like Microsoft, Franklin Templeton, and NBC Universal, alongside institutional-grade use cases such as Ondo’s tokenization platform. Alongside a growing DeFi ecosystem, which we’ll explore in detail later, these efforts have propelled its TVL to nearly $1B.

• Aptos streamlines Web3 access with keyless accounts, passwordless authentication, and transaction previews. Its support for emerging markets includes cost-efficient devices like the Jambo Phone, preloaded with blockchain tools. By combining advanced scalability with user-first design, Aptos is well-positioned for this cycle.

Sui – May 2023

Aptos’ twin is also a high-performance blockchain designed to deliver Web2-like simplicity to Web3. Also built on the Move programming language, it focuses on consumer-facing applications rather than institutional use cases.

• Sui caters to retail users with innovations like SuiPlay0X1, a gaming device bridging Web3 and traditional gaming. This focus has positioned Sui as a leader in consumer-facing dApps.

• Sui pairs sub-second finality and parallel processing with intuitive features like zkLogin for wallet creation via Google or Face ID, gasless interactions covered by apps, and QR-based payments with zkSend. By combining scalability with a user-friendly experience, Sui is primed to drive retail adoption and bridge the gap between Web2 and Web3, onboarding the next generation of crypto users.

• The recent launch of its Ethereum bridge and USDC support has significantly boosted Sui’s DeFi ecosystem, driving its TVL beyond $1.5B. This growth aligns with Sui’s recent ATH, just shy of $4.

We’ve just highlighted each blockchain’s unique features and selling points; now, let’s examine how these translate into real on-chain activity. We’ll assess key metrics like active addresses, decentralized exchange (DEX) trading volume, fees generated, and TVL to provide a clearer picture of each network’s performance.

Daily Active Addresses

Figure 3 – Daily Active Addresses on Smart-Contract Platforms in 2024

Source: Artemis, 21Shares

As shown in Figure 3 above, Solana emerged as a forerunner in user engagement, boasting the largest user base of 6.5M users driven by its trifecta of low fees, rapid transactions, and a user-friendly interface. A perfect storm for the memecoin frenzy that swept through the network this year, with more than 3.5M tokens launched on the memecoin factory pump.fun alone. Furthermore, Solana has become the preferred platform for the latest crypto trends, including tokens tied to AI-powered agents and DePIN protocols, as discussed earlier.

Similarly, Aptos has shown impressive user growth compared to other L1 blockchains like Avalanche, driven by its expanding DeFi ecosystem. Key developments fueling momentum include Blackrock’s BUIDL product expansion, the deployment of Tether’s USDT and Circle’s USDC on the network, and the upcoming integration of sBTC by Stacks. Together, these advancements are driving increased user enthusiasm and engagement across the network.

Ethereum, however, remains a formidable player, having effectively shifted a significant portion of its activity to L2 scaling solutions. This has resulted in almost 90% of transactions now occurring on L2s rather than the mainnet, underscoring the growing importance of scaling solutions as the execution layer for the legacy network. Despite this, L2s solutions have dramatically expanded Ethereum’s capabilities, achieving a 26-fold increase in throughput —382 transactions per second compared to 14 on the base layer—and attracting a user base of 2.6M, more than seven times Ethereum’s mainnet average of 350K users.

Decentralized Exchange Volume

Figure 4 – Decentralized Exchange Trading Volume on Smart-Contract Platforms in 2024

Source: Artemis, 21Shares

From a broader perspective, Ethereum and Solana dominate exchange activity, fueled by their thriving DeFi ecosystems. Ethereum has long maintained its top position, with the largest DeFi ecosystem boasting nearly $60B in TVL. Its financial applications have demonstrated remarkable resilience, withstanding multiple market challenges since 2020. In addition, Ethereum has been contributing almost 50% of all decentralized exchange (DEX) volume through the first three quarters of the year, until Solana flipped the script, as illustrated in Figure 4.

In fact, Solana has recently outpaced Ethereum across multiple metrics. For example, Solana’s DEX trading volume exceeded Ethereum’s by $40B in November, while its weekly DEX trading volume eclipsed Ethereum and all its Layer 2s combined during the final week of October. Additionally, three out of the top ten revenue-generating applications now operate on the Solana network. Notably, the Solana-based DEX Radyium generated $29B in trading volume over the last week, a 45% difference compared to Uniswap’s $20B. Furthermore, Solana-based platforms now account for three of the top ten DEXs, commanding over 40% of the total 24-hour trading volume across the entire crypto ecosystem.

Finally, while TON currently reports lower DEX volume and an underdeveloped DeFi ecosystem, its focus on simpler use cases has kept its TVL relatively modest. However, the upcoming Curve integration is expected to drive significant growth by enhancing stablecoin liquidity. Additionally, TON recently launched the testnet version of its bridging solution, enabling native Bitcoin transfers to its network. This breakthrough positions TON to tap into a vastly larger market, leveraging the $1.3T in dormant BTC.

Fees Generated

Figure 5 – Fees Generated by Smart-Contract Platforms in 2024

Source: Artemis, 21Shares

TON stands out among emerging platforms with its substantial network fees, driven by Telegram’s expansive Mini App ecosystem. This goes beyond crypto applications, integrating traditional services like ride-hailing and e-commerce, where TON-based assets are used for payments. Additionally, Telegram-centric offerings such as competitively priced global eSIMs, VPN solutions, and decentralized storage broaden its appeal, particularly to non-crypto-native users. All in all, this places TON as the third-highest fee-generating network compared to the other networks, which can be seen in Figure 8.

Alternatively, Solana has established itself as a fee-generating powerhouse, as depicted above in, Figure 5 with many leading dApps leveraging its high-speed, cost-effective blockchain. For example, the no-code memecoin creator platform Pump.fun has generated $220M in fees and attracted 150K users. Moreover, Solana-based protocols account for 50% of the top 15 fee-generating applications across all blockchains. Notably, trading bots Photon and BonkBot earn a combined $75M monthly, while Radium and staking provider Jito contribute $300M, collectively. This positioned Solana to currently generate 110% of Ethereum’s real economic value.

Finally, Ethereum’s recent Dencun upgrade led to a 90% reduction in L2 transaction costs. The upgrade introduced blobspace, an efficient data storage mechanism for L2 solutions. As this new system gains traction and approaches capacity, L2 transaction costs will gradually increase. This trend, already becoming apparent as shown below in Figure 6, suggests a potential resurgence in Ethereum’s mainnet revenue in the coming months.

Figure 6 – Ethereum Average Blob Count Per Block

Source: Dune Analytics, 21Shares

Total Value Locked

To recap, TVL serves as a crucial metric for financial ecosystems in the crypto space, analogous to assets under management in traditional finance.

Figure 7 – Total Value Locked in Smart-Contract Platforms in 2024

Source: Artemis, 21Shares

Ethereum, as the pioneer of DeFi, unsurprisingly maintains the largest TVL among all networks. However, the landscape is evolving rapidly.

Solana has emerged as a significant player, now commanding nearly 10% of DeFi’s TVL. This growth can be attributed to its seamless integration with traditional finance, expanding tokenization sector, and proliferation of payment-related use cases, as well as the surging maturity of its DeFi ecosystem.

Meanwhile, Avalanche continues to hold a substantial TVL, primarily due to its innovative subnet model that empowers businesses to create customizable networks with unprecedented control and flexibility. Consequently, Avalanche has become a hub for tokenization projects and institutional financial applications, both live and in development, as its network design effectively meets the business and privacy needs essential for TradFi.

In conclusion, these metrics provide a comprehensive view of the current standing and performance of various layer-1 blockchains. As seen in Figure 8, these platforms illustrate the diversity in blockchain usage patterns and provide insight into how each chain is positioned to compete in the landscape of blockchain-based applications. We believe there will not be “one chain to rule them all” and instead we will see a multi-chain future where certain chains are used over others for specific use cases.

Figure 8 – Summary of Key Metrics Across Smart-Contract Platforms

Source: Artemis, 21Shares

What’s happening this week?

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.

Amundi Fixed Maturity 2028 Euro Government Bond Broad UCITS ETF Dist (AK8E ETF) med ISIN LU2780871401, försöker spåra FTSE Euro Broad Government 2028 Maturity index. FTSE Euro Broad Government 2028 Maturity Index spårar statsobligationer utgivna av länder i euroområdet. Indexet speglar inte ett konstant löptidsintervall (som är fallet med de flesta andra obligationsindex). Istället ingår endast obligationer som förfaller under det angivna året (här: 2028) i indexet. Betyg: Investment Grade. Löptid: december 2028 (Denna ETF kommer att stängas efteråt).

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Amundi Fixed Maturity 2028 Euro Government Bond Broad UCITS ETF Dist är en mycket liten ETF med 1 miljon GBP-tillgångar under förvaltning. Denna ETF lanserades den 25 april 2024 och har sin hemvist i Luxemburg.

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Amundi Fixed Maturity 2028 Euro Government Bond Broad UCITS ETF Dist försöker replikera, så nära som möjligt, utvecklingen av FTSE Euro Broad Government 2028 Maturity Index (”Indexet”) oavsett om trenden är stigande eller fallande, och att minimera tracking error mellan delfondens nettotillgångsvärde och indexets resultat. Den förväntade nivån av tracking error under normala marknadsförhållanden anges i delfondens prospekt. Indexet är ett totalavkastningsindex: de kuponger som betalas av indexbeståndsdelarna ingår i indexavkastningen.

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