Layer 1: Report for the year 2024

Foreword: This article is partly based on our year-end 2024 report on the cryptocurrency market. We invite you to consult it free of charge or to obtain a physical version to support our work.

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→ Also find our market report on Bitcoin (BTC) in 2024:

Bitcoin (BTC): Market Report for 2024

The year 2024 ended on an extremely positive note, with Bitcoin (BTC) reaching historic price records and cryptocurrency adoption growing. In this report, we take a look back at Bitcoin's year 2024, through the prism of financial analysis, the mining sector, Bitcoin spot ETFs and innovations such as Ordinals and Runes, before looking ahead to 2025.

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Financial Review of Layer 1s

Note: Before delving into the financial analysis of layer 1 blockchains, it is important to note that we focused solely on the most representative blockchains in this sector. To achieve this, we selected the top 10 blockchains by Total Value Locked (TVL), namely Ethereum, Solana, Tron, BNB Chain, Hyperliquid, Sui, Avalanche, Aptos, and TON. While this choice excludes certain layer 1 blockchains, it provides a meaningful sample representing over 90% of the sector’s total TVL. The data presented in this article is current as of December 20, 2024.

While Bitcoin (BTC) achieved a 121% price increase in 2024, most altcoins delivered significantly lower returns over the same period. Layer 1 blockchains were no exception, with only two tokens outperforming BTC in 2024: SUI from Sui (+496.3%) and HYPE from Hyperliquid (+1337%, despite launching in late November). Other performances, though positive, fell short of BTC's growth.

Avalanche’s AVAX posted the weakest growth in 2024 at just 26.6%. Aptos’ APT surged nearly 110% in Q1 before plummeting 77%, ending the year with a net gain of over 40%, despite trading 35% below its January 1 price.

Ether (ETH) recorded the third weakest performance with a 72% increase in 2024. ETH started the year around $2,280, hit an annual high near $4,000, and then suffered a sharp correction between March and September, falling 47% to $2,150, below its January 1 level. However, a year-end rally brought ETH back near $4,000, buoyed by rising inflows into spot ETFs, suggesting a potential outperformance against Bitcoin.

Other notable performances include Solana's SOL (+122.8%), Toncoin’s TON (+154.4%), and Binance’s BNB (+132.6%), all of which achieved new all-time highs in 2024 before retreating late in the year.

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On-Chain Activity Review of Layer 1s

On January 1, 2024, Ethereum's TVL was approximately $38 billion. By the end of December, it had climbed more than 147% to $86 billion, outpacing ETH’s 72% price increase over the same period. This indicates a significant return of capital to the ecosystem.

Solana's TVL experienced an impressive 412% surge in 2024, growing from $2.2 billion to over $11 billion by year-end. This is especially remarkable considering Solana’s TVL had dropped below $300 million in November 2022 following FTX's collapse.

In November, Solana regained its lead over two direct competitors: BNB Chain and Tron. Tron’s TVL fell 9% to $7.8 billion in 2024, despite TRX gaining 164%. BNB Chain’s TVL rose from $4.6 billion to $6.7 billion (+45%) but remains far below its 2021 peak of $20–25 billion.

A notable rivalry unfolded among Avalanche, Sui, Aptos, Hyperliquid, and TON. Avalanche, which began the year with a comfortable lead, was overtaken by competitors over the course of the year.

Key observations for other layer 1 blockchains studied in this report include:

• Avalanche’s TVL rose 60%, from $1 billion to over $1.6 billion.
• Sui’s TVL soared 800%, from $211 million to $1.9 billion by year-end.
• Aptos’ TVL grew 895%, from $120 million to $1.23 billion, still trailing Avalanche.
• TON’s TVL skyrocketed 2100%, from $13 million to nearly $300 million, peaking at $750 million during the summer.
• Hyperliquid's TVL grew from a few million dollars to over $3 billion, making it the fourth-largest layer 1 blockchain.

From a more general point of view, Ethereum remains the dominant player in the layer 1 blockchain sector. Admittedly, Solana's high performance and low fees have attracted many users, resulting in an increase in activity metrics (DEX volume, active addresses, etc.), which we'll discuss in the next section. Nevertheless, Ethereum still has greater liquidity and the bulk of stablecoins in circulation, enabling it to remain the leader in terms of DeFi.

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The Layer 1 Trend in 2024

For years, an ideological battle has raged among Layer 1 blockchains, epitomized by the ongoing clash between Ethereum and Solana, which persisted throughout 2024. On one side, Ethereum advances toward modularity, increasingly positioning itself as a settlement layer for a burgeoning Layer 2 ecosystem. On the other, Solana maintains its vision as an all-in-one monolithic blockchain, offering high performance and low transaction fees.

In 2024, blockchains focused on performance and user experience captured the majority of activity. Does this mean Solana’s vision is prevailing over Ethereum’s? It’s a complex question, one we delve into in greater detail in our report on the year 2024.

Returning to the analysis, the growing user demand for Solana led to record activity on the network. Solana now surpasses Ethereum on nearly all key indicators: active users, transaction volume, DEX activity, and—for the first time in November—even blockchain revenue.

The implementation of the Dencun update on Ethereum led to a significant drop in fees (and thus revenue), from over $600 million in March to around $120 million in May. Meanwhile, increased activity on Solana drove a steady rise in its revenue, reaching a record-breaking $200 million in fees in November, compared to "just" $189 million for Ethereum.

Other blockchains also benefited from this market recognition that Solana's vision could serve as a long-term growth catalyst. This phenomenon was particularly evident financially: Sui (SUI) saw its price surge by 430%, making it the top-performing Layer 1 token of the year.

Despite a promising rise in its TVL to $1.9 billion in December, activity on Sui remains relatively modest. The network has around 830,000 monthly active users (compared to Solana’s 6.7 million) and a monthly transaction volume of $60 billion (versus Solana’s $243 billion).

It’s worth noting that, for now, other "Solana Killers" like Sei and Aptos have struggled to capture the market's attention (their tokens dropped by 29% and 7.2%, respectively), likely due to investor focus on the most promising candidate: Sui.

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Conclusion

The year 2024 intensified the polarization between the ideological visions of Layer 1 blockchains. The rise of high-performance, user-centric blockchains dominated the year’s trends, exemplified by Solana’s remarkable success in terms of on-chain activity, revenue, and valuation.

Meanwhile, Ethereum’s ecosystem—particularly its Layer 2s—was impacted by this dynamic, losing market share to Solana. Similarly, the success of monolithic blockchains overshadowed networks like Cosmos and Polkadot, whose adoption indicators remained weak in 2024.

Moreover, Solana’s popularity spurred investor interest in other networks with similar visions, particularly Sui, which saw significant token appreciation despite limited activity.

However, several questions remain unanswered: Will these networks convert financial interest into actual activity, or will the trend eventually fade? Technical advancements such as the introduction of parallel execution on EVM-compatible networks, the arrival of Pectra, and the proliferation of Ethereum Layer 2s could provide a new boost to this ecosystem.

Additionally, the imminent arrival of new networks expected in 2025, like Monad and Berachain, could shake up the landscape. Hyperliquid, meanwhile, may emerge as the unexpected "Solana Killer" no one anticipated.

Ultimately, 2025 will be a pivotal year to answer one central question: Ethereum’s modularity or Solana’s singularity? The answer will undoubtedly come from the users themselves.