Popular L1 performance comparison: Besides Solana, which ecosystems still have room for growth?

Is the current outperformance of prices related to improving fundamentals, or is it just the same old routine seen in the last market cycle? Written by: THOR HARTVIGSEN Compiled by: Shenchao TechFlow In the last bull market, the performance of L1 such as Solana, Avalanche, Fantom and Polygon was very good in terms of price increase. One might argue that this infrastructure dominance is characteristic of an industry still in its infancy. So has things changed significantly from 2021 to today? Judging from the price performance below, it appears that the situation has not changed. ## L1s + L2s + DeFi 30-day performance This begs the question: Is the current exceptional price performance related to improving fundamentals, or is it just the same old routine we saw during the last market cycle? This article analyzes the 8 best-performing L1s to try to answer this question. ## Solana (SOL) Solana differs from most L1s in that it uses parallel processing to verify and execute transactions without the need for additional scaling layers. This makes it a platform with low user interaction costs and high capital efficiency. ### Daily active addresses on Solana In terms of user activity, Solana is currently one of the most popular blockchains in the space, largely due to the emerging protocol airdropping tokens to early users. There is growing interest in leveraging the capabilities of the Solana virtual machine, such as Eclipse’s use of it to extend Ethereum’s current capabilities. One factor in Solana’s rise is the year-over-year reduction in its native token issuance as SOL’s inflation rate decreases. Here are some of the ecosystems on Solana. If the ecosystem continues to prosper, the token price should see good growth: Jito ($JTO: $3 billion FDV): Jito serves as Solana’s premier liquidity staking protocol, with over 10,000 After users performed airdrops, they gained great popularity in the crypto community. Bonk ($BONK: $1.4 billion FDV): As the most popular community coin on the Solana blockchain, $BONK has a huge market capitalization, with the price rising by approximately 400% in the past 30 days as more and more people use the network and participate in it . Marginfi ($MRGN: Not yet issued): Marginfi is a decentralized lending protocol with a current total value locked (TVL) of over $240 million, which currently rewards users with points for interacting with the platform. These points will be used to later airdrop their upcoming tokens to users. If you are interested in airdrops, you can check out the recently released airdrop calculation rules here. ## Avalanche (AVAX) Avalanche is a fast and scalable platform that allows developers to build custom blockchains or use existing subnets (divided parts of a blockchain). The Avalanche main network actively uses three blockchains, as shown in the image below. Most of us are familiar with C-chain because that’s where DeFi applications live. The main Avalanche network itself is a special subnet. Currently, there are various projects deploying their own subnets on the system, some noteworthy projects include: Beam (Games): Aims to provide a platform for developers through a community-driven approach UPTN (Web3): Piloted in South Korea, will Integrating Blockchain Technology into Real-World Business DFK (Games): gameFi Platform, Defi Kingdom ### TVL by Avalanche

As AVAX broke through the long-term volatile price range and TVL increased significantly, the ecology on AVAX gradually gained more popularity. Importantly, this growth is due to AVAX’s appreciation rather than additional token inflows. The bull case for Avalanche is the growing number of platforms deploying subnets that choose this approach over the L2 solutions currently available on the market to meet the needs of their specific applications. If there is a sustained upward trend in the ecosystem, some Avalanche ecosystems may perform well: Trader Joe (JOE: $307.81 million FDV): The chain’s top DEX and a major component in the ecosystem, has been actively rolling out updates and in Large fees are incurred when transaction volume surges. Benqi (QI - $182.74 million FDV): Benqi offers a range of DeFi products such as lending, liquidity staking, and validator leasing. Along with the huge growth of its liquidity staking arm, TVL, the price of QI has increased by approximately 250% in the past two weeks. ### Near (NEAR) Near is a blockchain, also known as an operating system, that provides interoperability across any blockchain. Their core focus is scalability, achieved through “sharding,” which splits the network into smaller parts to process transactions more efficiently while maintaining speed, low cost, and decentralization. ### Near daily active address By partnering with EigenLayer, Near’s upcoming “Fast Final Layer” will provide faster and cheaper transactions for Ethereum rollups. The testnet is expected to launch in the first quarter of 2024. In addition, real-time market data provider Pyth has also entered Near to provide their oracle solutions. This enables on-chain applications to easily consume stock, commodity and market data. If the ecosystem continues to grow, some of Near’s ecological applications may perform well: Meta Pool (META: $2.27 million FDV): A multi-chain liquidity-based ecosystem offering a range of products, including: LSTs, liquidity provision, Launch Platform and Bonds. Meta Pool has a cumulative TVL of US$42.56 million, 97% of which is on Near; Ref Finance (REF: US$9.39 million FDV): Ref with a TVL of US$16.87 million is the largest AMM on Near, where users can trade at low Transaction costs for spot or isolated trading. ### ## Injective (INJ) Built on the Cosmos SDK, Injective is a blockchain targeted at financial applications, providing fast transaction processing and low gas fees, while providing strong interoperability with various other chains (e.g., Ethereum, Solana). ### YTD INJ Price Trend ### INJ trading volume The project is funded by a number of well-known tech and crypto industry investors. Despite its large market cap, there isn’t much on-chain activity outside of staking, but there are some significant efforts to attract builders to the platform. Earlier this year, a $150 million ecosystem fund was created to accelerate interoperable infrastructure and DeFi adoption. Although the transaction volume has been on the rise in the past few months, a daily transaction volume of 5-7 million US dollars is not much for a project with a market value of 3 billion US dollars. ### ## Polygon (MATIC) Polygon (PoS) is an EVM-compatible sidechain designed to enable low-cost, fast transactions. ### Polygon DEX trading volume Polygon DEX has seen a slight increase in trading volume in recent months, but not as fast as Solana or Avalanche. In a blog post published in July of this year, Polygon announced their 2.0 upgrade. Polygon is building a modular stack that includes components such as “Supernets” (application-specific chains), privacy rollups, and the recently launched Polygon zkEVM. The main points of this update include: * Redesigned protocol architecture; * Token renamed from MATIC to POL; * Optimized ecosystem benefits: * Enhanced security; * Increased scalability; These may become MATIC in 2024 Rising factors for the coin. If MATIC rebounds, applications worth watching are: * Quickswap (QUICK: $45.02 million FDV) is deployed on multiple Polygon layers, and most of its $125.65 million TVL is on the PoS chain, where users can exchange tokens and trade Perpetual contracts while enjoying a wide range of products and services beyond DeFi. QuickSwap has generated $10.3 million in fees and approximately $11.1 billion in cumulative transaction volume this year. ## THORChain (RUNE) THORChain operates as an independent L1 cross-chain AMM, allowing users to exchange native assets on multiple chains without the use of wrapping or anchoring assets. ### THORChain Transaction Volume It’s clear from transaction volume metrics that the protocol’s underlying technology is being used effectively for on-chain transactions. THORChain endorsed lending protocols are actively burning a large portion of RUNE’s supply. Its lending model allows users to borrow BTC or ETH with multiple collateral options, zero interest and no liquidation required. However, these loans require higher minimum collateral ratios, ranging from 200% to 500%, depending on market conditions. Ecosystems that are likely to perform well if the ecosystem continues to grow include: THORSwap (THOR: $129.54 million FDV): This DEX aggregator offers one-click token swaps between 10 chains and over 5,000 assets, as well as staking its Users of the token share 75% of the revenue. The protocol is currently conducting monthly token burns based on transaction volume and recently reached a $1 billion TVL. Maya (CACAO: $73.03 million FDV): A fork of THORChain, Maya is a cross-chain DEX designed to directly compete with centralized exchanges by reducing the risks associated with such entities while providing deep liquidity and low fees . ## Fantom (FTM) Fantom is a high-performance blockchain from the previous cycle that hosted one of the largest DeFi ecosystems. Fantom has seen a significant decline in activity since the Terra crash, Tomb decoupling, and the Multichain bridge vulnerability. ### TVL of FTM Despite going through a rough patch, the team is still actively planning to launch new blockchain technology soon to stay competitive. Leveraging new virtual machines and improved storage capabilities, their upcoming version called “Sonic” is expected to achieve over 2000 TPS. The upgrade is expected to be available in spring 2024. Applications that may perform well if the ecosystem continues to grow include: * SpookySwap (BOO: $11.33 million FDV); Fantom, the leading DEX, offers native and cross-chain token swaps and distributes a portion of transaction fees to stakers. * BeethovenX (BEETS: $4.43 million FDV); BeethovenX, forked from Balancer V2, is an AMM that provides users with optimal exchange rates, minimal slippage and stable profit opportunities. Token holders receive a portion of the exchange fees generated by the platform. * WigoSwap (WIGO: $14.12 million); Wigo, which provides a range of products from transactions to games, is committed to becoming the core of the Fantom ecosystem. ## Cardano (ADA) Cardano is a PoS blockchain that emerged in the last cycle and is very popular among ordinary investors. Although ADA has become an important meme in the minds of many, the ecosystem continues to grow, indicating increased adoption. ### Cardano’s TVL Although not known for its DeFi scene, Cardano has performed well with on-chain value and activity growth driven by its loyal community. To further stimulate usage and network efficiency, pain points around scalability are being addressed with an L2 solution called “Hydra”. Hydra is defined as an isomorphic L2 for off-chain processing, and each Hydra “head” can handle 1000 TPS. Some ecological applications on Cardano: Indigo (INDY: $114.91 million FDV) Cardano’s preferred CDP platform, providing users with the ability to create fully collateralized synthetic assets such as BTC, ETH, and USD. Minswap (MIN: $174.28 million FDV) The community-focused Minswap protocol is the DEX leader in the ecosystem, still leading in terms of TVL and transaction volume despite a breach incident earlier this year. Below is a summary of each L1 metric presented in today’s research report. All in all, it’s clear that some of these L1s are growing in basic metrics like daily users, TVL, and transaction volume. What is even more evident, however, is that the recent price appreciation of many of these products has far exceeded fundamental growth. We believe these tokens should be viewed more as narrative trades rather than long-term fundamental investments.