2024 Annual Report on the Public Chain Industry: From Infrastructure Competition to Application Breakthroughs

Author: Stella L ( stella@footprint.network)

*Data Source: * Footprint Analytics Public Chain Research Dashboard

2024 marks a significant watershed in the public chain industry, with the industry's focus shifting from technological competition to practical application. In this year, the market capitalization of public chains grew by 105.3% to reach $2.8 trillion, Bitcoin's price broke through $100,000, institutional adoption was achieved through ETFs, Ethereum's Layer 2 networks expanded to over 200 chains, and Bitcoin's Layer 2 TVL grew by 1,277.6%, all demonstrating the industry's transition from technological experimentation to practical real-world applications. The public chain industry is undergoing a gradual shift from being driven by technology to being driven by application demand.

Note: Unless otherwise specified, all data in this report is as of December 20, 2024.

Market Dynamics: Growth and Transformation

The public chain industry achieved unprecedented growth in 2024, with multiple key indicators showing significant expansion.

Total Market Capitalization of Public Chains increased by 105.3% to $2.8 trillion. Bitcoin's dominance rose to 69.8%, while Ethereum's share fell from 20.4% to 15.2%. The shares of BNB Chain and Solana remained stable at 3.5% and 3.3%, respectively, while other platforms accounted for 8.1%.

The DeFi sector also showed strong growth in 2024, with the total value locked (TVL) reaching $102.8 billion by year-end, a year-on-year increase of 88.6%. Among the top 10 public chains by TVL, Bitcoin and TON saw the most significant increases, both exceeding 2,000%. Aptos, Sui, and Solana also performed well, growing by 754.4%, 677.1%, and 321.3%, respectively. However, Tron and Avalanche both experienced declines in TVL.

The Ethereum Layer 2 ecosystem experienced significant centralization in 2024. Arbitrum maintained its leading position with a TVL of $10.6 billion and a market share of 41.1%, down from 50.8% in 2023. Base emerged as the dark horse of the year, jumping to second place with a TVL of $5.8 billion (22.5% share), while Optimism ranked third with a TVL of $4 billion (15.8%). Together, these three platforms accounted for 79.1% of Ethereum's L2 DeFi TVL, while previous competitors like Blast, zkSync, and Starknet saw their market shares decline.

Meanwhile, the ecosystem continued to expand, with 50 Rollups and 70 Validium & Optimium currently running on the mainnet, along with approximately 90 upcoming chains, bringing the total number of Ethereum L2s to over 200.

The Bitcoin Layer 2 and sidechain ecosystem experienced explosive growth, with a total locked value of $2.6 billion, a substantial increase of 1,277.6% compared to 2023. Core led with a TVL of $790 million (30.3% market share), followed by Bitlayer ($500 million, 19.4% share) and BSquared ($330 million, 12.7% share). This growth was not only reflected in TVL but also in the number of active chains, which more than doubled over the year, now nearing 20 chains.

Competitive Landscape: Leaders and Challengers

In 2024, the competitive landscape of the public chain ecosystem underwent significant changes, primarily characterized by Bitcoin's enhanced dominance, Solana's resurgence, and the rise of emerging challengers.

Bitcoin: From Store of Value to Financial Infrastructure

Bitcoin achieved remarkable growth in 2024, with its price rising by 129.2% and market capitalization increasing by 131.7%. This growth was driven by institutional adoption of spot ETFs, the halving event in April, and positive sentiment following the U.S. elections. In addition to breaking the $100,000 price milestone, there were two key developments in the Bitcoin ecosystem:

Increased Institutional Adoption: The successful launch of spot ETFs in January fundamentally changed the institutional access landscape, with BlackRock's product quickly reaching $20 billion in size. Bitcoin surpassed silver and Saudi Aramco to become the seventh-largest asset globally, marking a transition from a speculative asset to a recognized store of value.

Rise of BTCfi: The Bitcoin ecosystem expanded beyond price growth through innovative financial products. Babylon's Bitcoin staking project, Solv Protocol's cross-chain solutions, and Core's Fusion upgrade all showcased the increasingly mature ecosystem. Progress was made in cross-chain functionality through integrations with the BOB network and Optimism, as well as the BEVM's "Super Bitcoin" framework, although standardization still faces challenges.

Ethereum: Layer 2 Drives Ecosystem Evolution

2024 was a pivotal year for Ethereum's transformation into a Layer 2-centric ecosystem. Despite a price increase of 55.8% to $3,744, Ethereum faced complex challenges in repositioning its role and maintaining relevance against the backdrop of Layer 2 adoption growth. The successful launch of spot ETFs in July garnered some institutional recognition, but Ethereum's price performance lagged significantly behind Bitcoin.

The Ethereum mainnet underwent significant changes with the "Cancun upgrade," successfully reducing Layer 2 transaction costs and enhancing scalability. However, the migration of activity to Layer 2 led to a decline in Ethereum's own fee revenue, raising discussions about Ethereum's long-term sustainability. The Ethereum Foundation responded with several initiatives, including the implementation of Proto-Danksharding (EIP-4844), the development of cross-L2 communication standards, and strengthening security requirements for Layer 2 solutions.

The Layer 2 ecosystem exhibited significant growth and consolidation throughout the year. Notable new entrants enriched the ecosystem, including World Chain, Uniswap's Unichain, and Sony's Soneium. This evolution highlighted Ethereum's transition from a pure execution layer to a diversified Layer 2 ecosystem providing settlement and security. While questions remain regarding revenue models and competitive dynamics, Ethereum's continued development in developer activity and innovative scaling solutions demonstrates its adaptability.

Solana: The Third Giant

2024 witnessed a strong comeback for Solana, with its price rising by 70.8% and market capitalization increasing by 90.9%, with the coin price surpassing $260 in November, setting a new historical high. This revival began with the January Jupiter airdrop, leading to unprecedented activity within the Solana ecosystem. Solana established itself as a hub for retail trading, nurturing a vibrant meme and DeFi community. Beyond meme culture, Solana made strides in various areas: re-staking protocols, modular Layer 2 solutions, and stablecoin innovations. The ecosystem further extended its influence through the expansion of SVM chains such as Eclipse, Soon, Atlas, and Sonic.

The Rise of Emerging Forces: TON, Sui, and Base

TON: Social Integration Drives Platform Growth

The Open Network (TON) demonstrated significant growth in 2024, with Toncoin's price rising by 149.6% and market capitalization increasing by 84.3%. TON's success primarily stemmed from its deep integration with Telegram, effectively bridging traditional social networks and blockchain technology. The platform simplified the crypto experience through Telegram wallet features and blockchain integration, providing millions of users with easy access to gaming, meme, and DeFi applications, establishing a model for mass adoption.

Sui: From Move Language Pioneer to Ecosystem Leader

Sui performed impressively, with its token price soaring by 461.6% and market capitalization increasing by 1,363.8%. This success reflects market confidence in Move language technology and ecosystem development. Sui focuses on DeFi and gaming, including Telegram game integration and the innovative SuiPlay0X1 gaming console development, showcasing its comprehensive layout for ecosystem growth. The platform's emphasis on user experience and protocol development has created positive network effects, attracting both developers and users.

Base: Institutional Background Drives Rapid Growth

Base's significant growth was driven by several key factors. Coinbase significantly lowered the entry barrier for mainstream users through its user-friendly smart wallet. The platform gained substantial momentum from successful social applications like friend.tech and Clanker, while the popularity of memecoins further boosted activity on the Base chain. The implementation of the "Cancun upgrade" significantly reduced transaction fees, enhancing Base's appeal to developers and users.

Major Trends in the Public Chain Industry in 2024

New Chains Emerging

In 2024, project teams launched their own public chains. DeFi giant Uniswap announced Unichain; gaming platform Treasure DAO developed a ZK-based Layer 2; the NFT space saw Pudgy Penguins launch Abstract; and Web3 platform Galxe launched Gravity. Moreover, the entry of innovative new chains like Monad, Berachain, and HyperLiquid reflects the public chain industry's shift towards specialized blockchain infrastructure.

Institutional Adoption: From Exploration to Strategic Integration

Shift in Institutional Participation

2024 marked a decisive shift in institutional adoption from experimental blockchain initiatives to strategic implementation. Financial institutions led this transformation, with BlackRock's Bitcoin ETF quickly reaching $20 billion, and PayPal expanding PYUSD to Solana. Tech giants demonstrated deeper participation through innovative means: Sony launched the Soneium chain for entertainment applications, while Google Cloud expanded its Web3 portal services. Infrastructure development was particularly noteworthy, with Circle launching native USDC on Sui and Visa integrating Solana for settlements.

Change in Institutional Investment Paradigms

The public chain sector exhibited a strong recovery in 2024, with 174 financing events raising a total of $1.7 billion, a 137.1% increase from the previous year. Notably, institutional investment strategies shifted from purely infrastructure-focused to application-oriented innovations. Early investment events accounted for 21.4% of total financing events, while Series A and B rounds accounted for 31.8%, reflecting the ecosystem's increasing maturity.

The investment philosophy of venture capital underwent a significant evolution, prioritizing user-facing applications over traditional infrastructure development. This was evident in substantial investments in consumer-facing projects: Monad raised $225 million to optimize user experience, while Celestia and Berachain each secured $100 million for application-oriented infrastructure.

From Technological Competition to Application Innovation

The public chain industry experienced a fundamental shift in 2024, moving from a technology-driven to an application-driven strategy. This shift challenged the previously dominant industry mindset of "build it and they will come." Despite significant improvements in technological capabilities, the increased network capacity did not directly translate into corresponding user growth. For instance, although "hardware" is limited, Ethereum's base layer has a higher "users per second" (UOPS) than most Layer 2s, highlighting the complex relationship between technological capability and actual adoption.

This reality prompted a strategic shift within the ecosystem. Blockchain platforms increasingly focused on identifying specific user needs and building targeted solutions rather than pursuing pure technological advancement. This "find users and then build" approach is reflected in several successful initiatives. Social finance integration emerged as a particularly effective strategy, with TON's Telegram integration and Base's friend.tech demonstrating how familiar social platforms can drive blockchain adoption. By simplifying user experiences through account abstraction and familiar authentication methods, the entry barrier for mainstream users was significantly lowered.

The evolution of meme culture in the blockchain space further exemplifies this shift towards application-oriented development. Initially purely speculative activities evolved into effective user acquisition channels, particularly on platforms like Solana and Base. These networks successfully leveraged meme-related initiatives to drive ecosystem growth while fostering sustainable community participation. The success of these user-centric approaches indicates that sustainable growth in the blockchain space increasingly relies on understanding and serving user needs rather than purely advancing technological capabilities.

Outlook for 2025

As the blockchain industry transitions from technological experimentation to practical implementation, 2025 is expected to be a significant year of transformation.

Regulatory Clarity

There is hope for significant improvement in the regulatory environment, particularly in the United States. A clearer regulatory framework is expected to benefit the entire industry, especially with progress in stablecoin legislation. This regulatory clarity will facilitate institutional adoption of blockchain through an increase in regulated products and services while fostering competition in crypto regulation across jurisdictions.

Specialization of Public Chains

The specialization of public chains is becoming a dominant trend, shifting from generic Layer 1 competition to purpose-driven architectures. With cross-chain infrastructure support, application-specific chains and optimized execution environments are expected to see substantial growth. The "Rollup as a Service" (RaaS) sector is poised for expansion, providing enterprises and project teams with more convenient customized blockchain solutions.

Technological Innovation and AI Integration

In 2025, technological innovation will shift from pure breakthroughs to application-oriented infrastructure upgrades. The implementation of Proto-Danksharding will double Blob capacity, pushing Layer 2 scaling into a new phase; the development of chain abstraction technology will lead to more intuitive user experiences; and the standardization of cross-chain communication will simplify interoperability.

At the infrastructure level, we expect to see more developments driven by actual demand. Modular blockchain technology stacks will mature, providing specialized solutions for data availability, settlement, and execution layers. Notably, the deep integration of AI technology with blockchain will reshape the infrastructure landscape: from improving user interfaces to enabling complex on-chain AI agents, from decentralized model training to supporting social finance integration, these innovations will support more complex application scenarios while maintaining security and decentralization, laying a solid foundation for the next wave of blockchain innovation.

Conclusion

The past year has proven that sustainable growth relies not only on technological capabilities but also on meaningful user adoption and practical utility. With increased regulatory clarity, advancements in technological infrastructure, and greater institutional participation, the foundation for meaningful large-scale adoption of blockchain technology is now in place. The focus has shifted from "what's technically possible" to "what's practically valuable," and this transition will define the next phase of industry growth in 2025.

This article is for industry research and communication purposes only and does not constitute any investment advice. The market is risky, and investments should be made cautiously.