July 2024 Public Chain Industry Research Report: Solana Shines Amid Market Volatility, Layer 2 Competition Heats Up

Author: Stella L (stella @ footprint . network), PANews

Data Source: Footprint Analytics Public Chain Research Page

In July, the cryptocurrency market was active with significant volatility, reflecting the overall trend of global financial markets. The listing of spot Ethereum ETPs in the United States, along with former President Trump's high praise for Bitcoin, highlighted the resilience and immense growth potential of the cryptocurrency industry. The market situation was complex and variable, with Bitcoin prices gradually stabilizing, while Solana emerged as one of the best-performing currencies; meanwhile, Ethereum faced some downward pressure after the ETP listing. During this wave of volatility, the total market capitalization of public chain cryptocurrencies saw a slight increase, mainly driven by key projects like Bitcoin and Solana. As competition in the Layer 2 space intensifies, emerging innovative projects and forces are reshaping the competitive landscape of the industry.

This report's data comes from Footprint Analytics' Public Chain Research Page. This page provides an easy-to-use dashboard that includes the most critical statistics and indicators in the public chain space, updated in real-time.

Cryptocurrency Market Overview

In July, the volatility of the entire financial market increased. The large tech stocks and AI-related stocks that led the market in the first half of the year performed poorly. The cryptocurrency industry made significant progress, including the launch of spot Ethereum exchange-traded products (ETPs) and the positive endorsement of Bitcoin by former President Trump, a Republican presidential candidate.

The price performance in July showed a divergent trend. By the end of the month, the impact of the German government's sale of Bitcoin had diminished (which ended on July 13), and the repayment distribution from Mt. Gox to its users had a limited impact on the market. Bitcoin, despite fluctuations, ended July with a slight increase. Apart from Bitcoin, Solana's performance was particularly striking, with a monthly increase of 25%. In contrast, Ethereum's price declined after the launch of spot Ethereum ETPs in the U.S. Although the launch of these ETPs supported Ethereum's price beforehand, the subsequent selling pressure led to a price drop.

Public Chain Overview

As of the end of July, the total market capitalization of public chain cryptocurrencies increased by 1.2% compared to June, reaching $1.98 trillion. The market leaders were Bitcoin, Ethereum, BNB Chain, and Solana, with market shares of 64.8%, 19.7%, 4.3%, and 4.1%, respectively. Bitcoin's absolute share increased by 1.5%, Solana by 0.6%, while Ethereum decreased by 1.5%.

Data Source: July 2024 Public Chain Token Market Share

In July, the cryptocurrency market experienced significant fluctuations. Bitcoin started the month at $62,923 and ended at $64,938, achieving a 3.2% increase. On July 5, Bitcoin hit a monthly low of $56,608, while on July 27, it reached a high of $68,806. Ethereum opened at $3,438 and fell to $3,243 by the end of the month, a decrease of 5.7%. On July 7, Ethereum recorded its monthly low of $2,939, and on July 21, it reached its highest price of $3,542.

Data Source: Bitcoin and Ethereum Price Trends

Solana's token price increased by 18.2%, with a market capitalization growth of 18.9%. The meme coin craze continued, with active on-chain activities. For example, several Neiro tokens surged after the owner of the Doge meme coin announced the adoption of a 10-year-old rescue Shiba Inu named Neiro.

Kaspa continued to perform strongly, with its token KAS price rising by 14.5% and market capitalization increasing by 15.7%. KAS reached a new historical high of over $0.2 in July. The blockDAG (Block Directed Acyclic Graph) technology has received increasing attention, especially after Bitcoin miner Marathon Digital (MARA) announced plans to diversify its mining operations and expand into Kaspa last month.

Data Source: July 2024 Public Chain Token Prices and Market Capitalization

In terms of Total Value Locked (TVL), the TVL of public chains reached $76.5 billion by the end of July, remaining stable compared to June. Ethereum, TRON, and BNB Chain continued to lead in TVL.

TON has become the fifth-largest chain by token market capitalization, but there is still significant growth potential in its DeFi sector, with a TVL ranking ninth among public chains at $770 million. Two decentralized exchanges, STON.fi and DeDust, accounted for over 60% of the TVL.

The TVL of the Core blockchain grew by 122.5% throughout the month, thanks to the launch of a dual staking model. This model rewards users who stake Bitcoin in Core for an extended period, increasing their BTC staking rewards when they also stake CORE.

Data Source: July 2024 Public Chain TVL

In a month marked by volatility and varied price performance, the decentralized prediction market Polymarket on Polygon stood out. Polymarket allows users to build portfolios based on their predictions, with rewards for correct forecasts. Utilizing blockchain technology, Polymarket ensures transparency, security, and immutability for trades on a wide range of topics, including current major events, politics, and public health issues. The U.S. elections brought additional attention to Polymarket, with its TVL doubling in July.

Major Developments in Layer 1 Public Chains in July 2024

BNB Chain

• On July 18, BNB Chain officially announced that it will hold the "Become a Champion Builder" hackathon in the third quarter of 2024, with a prize pool exceeding $500,000.
• The second Sunset fork plan for BNB Chain has been completed.

Solana

• Solana launched a $400,000 funding program for developers of Solana Actions and Blinks Tools.

NEAR

• Grayscale officially launched the Grayscale Decentralized AI Fund LLC, with Near being the highest-weighted asset in the fund.

Sui

• Sui announced the launch of the Sui Index Framework, providing customizable access to data on the Sui chain.

Polygon

• Polygon launched a new ZK proof system "Plonky3" as an open-source toolkit, which will be more versatile than "Plonky2."
• Move language developer Move ment Labs joined Polygon's AggLayer.

Ronin

• Sky Mavis released a review of the first half of 2024, noting that over 3 million users downloaded the Ronin wallet in the past six months, with RON daily active addresses soaring to a historic high of 1.5 million.

Ton

• The TON blockchain will launch a new Layer 2 network based on Polygon technology.
• The TON Foundation partnered with Animoca Brands' Mocaverse to launch a $20 million ecosystem development plan.

Core

• Core announced that Animoca Brands has launched a validation node on the chain to support Core's security and decentralization.
• The Core Foundation announced a dual staking model to enhance Bitcoin staking yields.

Layer 2

In July, following the launch of spot Ethereum ETPs in the U.S. market, Ethereum Layer 2 experienced slight fluctuations amid Ethereum's price pullback. Arbitrum One, Optimism, and Base led in TVL market share, holding 59.8%, 20.2%, and 8.27%, respectively, but all had monthly growth rates of less than 5%.

With on-chain activity declining after the end of airdrops, Blast's TVL fell by 14.3%, and zkSync Era's TVL decreased by 11.5%.

Scroll's TVL grew by 13.2%, driven by activities on Scroll Canvas, a platform for collecting and showcasing achievements, statuses, and on-chain certificates within the Scroll ecosystem. Users can interact with various projects in the ecosystem to earn achievements in the form of "badges."

Data Source: July 2024 Ethereum Layer 2 Overview - Rollups (Bridge-related Metrics)

On the other hand, Bitcoin scaling solutions, including Layer 2 and sidechains, continued to grow in July, although the total TVL was below June's peak. Merlin, Bitlayer, and Rootstock held the largest TVL market shares at 44.0%, 19.6%, and 10.3%, respectively.

Solv Protocol became the largest DeFi protocol in the Bitcoin ecosystem by the end of July, with a TVL of $570 million, accounting for 32.3% of the total TVL of Bitcoin scaling solutions.

Data Source: Bitcoin Ecosystem Public Chain TVL

The Layer 2 space is becoming increasingly competitive. A new project called TON Applications Chain (TAC) is developing a Layer 2 solution for the TON blockchain ecosystem. Supported by investors focused on the TON blockchain, The Open Platform, TAC will utilize Polygon's Chain Development Kit (CDK).

Meanwhile, the first Move EVM Layer 2 Move ment blockchain launched its public testnet Parthenon, officially starting on July 30. The Move ment's MOVEDROP project allows the community to participate in the transition from testnet to mainnet.

Major Developments in Layer 2 Public Chains in July 2024

Arbitrum

• The Arbitrum community released a proposal vote to "allow the deployment of new Orbit chains on any blockchain," planning to open permissions for deploying Orbit chains on networks outside of Ethereum.

Optimism

• Optimism announced the results of Retro Funding 4, proposing to provide 10 million OP rewards to 207 projects, with Zora and Layer 3 receiving 500,000 OP each.

Starknet

• Eduard, founder of the Starknet derivatives trading protocol ZKX, announced that ZKX will cease operations.

Base

• U.S. politicians can accept cryptocurrency donations on the Base chain.

Merlin Chain

• Merlin Chain partnered with Ordzaar and OrdinSwap to launch the "Fourth Major Ordinal" whitelist event.

Rootstock

• Rootstock announced it will hold its first ecosystem summit on August 1.

Blockchain Games

In July, a total of 1,588 games were active across major blockchain networks. BNB Chain, Polygon, and Ethereum dominated the market, accounting for 21.7%, 19.0%, and 15.1% of the market share, respectively.

Ronin, opBNB, and Saakuru Verse led in on-chain DAU, with average daily DAUs of 1.1 million, 479,600, and 354,500, respectively. By the end of July, their DAU market shares were 32.6%, 18.7%, and 3.4%.

Data Source: Daily Active Users of Blockchain Games on Various Public Chains

Ronin's DAU market share significantly increased from 18.6% on July 1 to 32.6% on July 31, thanks to the recovery of Pixels data and the launch of new games Lumiterra and Fight League. Additionally, games on Ronin performed well in user retention, frequently appearing on the weekly new user retention leaderboard. For instance, in the last week of July, five games ranked among the top ten for new user retention.

opBNB's DAU share rose from 13.1% in July to 18.7%, driven by the growing popularity of its games MEET48 and SERAPH: In The Darkness. Notably, SERAPH: In The Darkness, a dark fantasy ARPG, gained significant attention on opBNB since its launch in mid-July.

The Oasys Layer 2 Saakuru Verse saw a substantial increase in DAU during the last ten days of June, but growth slowed in July, with DAU market share dropping from 14.1% at the beginning of the month to 3.4% by the end. Nevertheless, Saakuru maintained the third-highest average DAU across all chains. Saakuru's unique agent model, where the chain operator (AAG) bears transaction costs, allows users and developers to interact without incurring gas fees, significantly lowering the entry barrier.

Base's DAU skyrocketed from 8.2K to 222.5K within a month, with an average DAU of 101.6K, primarily driven by the game BLOCKLORDS Dynasty.

Financing Situation

In July, the public chain industry recorded 9 financing events, totaling $570 million, a decrease of 20.1% compared to June. Two of these events did not disclose amounts, and no Layer 1 announced new financing rounds.

July 2024 Public Chain Financing Events (Data Source: crypto-fundraising.info)

Igloo, the parent company of Pudgy Penguins, raised $11 million in a funding round led by Peter Thiel's Founders Fund. Igloo has newly established Cube Labs to develop Abstract, a consumer-facing Layer 2 blockchain built on Matter Labs' ZK Stack and Eigen Layer's EigenDA. This new blockchain aims to make decentralized application development easier, cheaper, and more secure.

As the number of Layer 2 solutions continues to grow, the infrastructure supporting these Layer 2s is becoming a promising business. In July, the Ethereum Rollup deployment platform Caldera and Web3 AI infrastructure developer Network3 secured new funding.