2024 Annual Report on the Public Blockchain Industry: From Infrastructure Race to Application Breakthrough

The year 2024 marks an important watershed for the public blockchain industry, shifting the focus from technological competition to practical application. (Background: A quick overview of this year's winners and losers among various L1 public blockchains, with the champion soaring over 7000%) (Context: The veteran public blockchain XRP is rejuvenating; how far can it go in the future?) The year 2024 signifies an important turning point for the public blockchain industry, as the industry's focus transitions from technological competition to practical application. In this year, the market value of public blockchains grew by 105.3% to reach $2.8 trillion, Bitcoin's price surpassed $100,000, and institutional-grade adoption was achieved through ETFs, with Ethereum's Layer 2 network expanding to over 200 chains, and Bitcoin's Layer 2 TVL growing by 1,277.6%. All these demonstrate the industry's transition from technological experimentation to practical real-world applications. The public blockchain industry is undergoing a gradual shift from being driven by technology to being driven by application demands. Note: Unless otherwise stated, all data in this report is as of December 20, 2024. Market Dynamics: Growth and Transformation The public blockchain industry achieved unprecedented growth in 2024, with multiple key indicators showing significant expansion. The total market value of public blockchains increased by 105.3% to $2.8 trillion. Bitcoin's dominance rose to 69.8%, while Ethereum's share dropped from 20.4% to 15.2%. The shares of the BNB chain and Solana stabilized at 3.5% and 3.3%, respectively, with other platforms accounting for 8.1%. The DeFi sector also demonstrated strong growth momentum in 2024, with the total locked value (TVL) reaching $102.8 billion by year-end, a year-on-year increase of 88.6%. Among the top 10 public blockchains by TVL, Bitcoin and TON saw the most significant increases, exceeding 2,000%. Aptos, Sui, and Solana also performed well, with increases of 754.4%, 677.1%, and 321.3%, respectively. However, the TVL of Tron and Avalanche saw declines. 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 annual dark horse, 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%). These three platforms together accounted for 79.1% of the Ethereum L2 DeFi TVL, while previous competitors such as Blast, zkSync, and Starknet saw declines in market share. Meanwhile, the ecosystem's scale continued to expand, with 50 Rollups and 70 Validium & Optimium currently executing on the mainnet, along with about 90 chains set to launch, bringing the total number of Ethereum L2s to over 200. The Bitcoin Layer 2 and sidechain ecosystem experienced explosive growth, reaching 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 reflected not only in TVL but also in a more than doubling of the number of active chains, now nearly 20. Competitive Landscape: Leaders and Challengers In 2024, the competitive landscape of the public blockchain ecosystem underwent significant changes, mainly characterized by Bitcoin's strengthened dominance, the resurgence of Solana, and the rise of emerging challengers. Bitcoin: From Store of Value to Financial Infrastructure Bitcoin achieved remarkable growth in 2024, with a price increase of 129.2% and a market value growth of 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 surpassing the $100,000 price milestone, there were two key developments in the Bitcoin ecosystem: Institutional Adoption Boost: The successful issuance 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. The Rise of BTCfi: The Bitcoin ecosystem achieved an expansion suite 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 an increasingly mature ecosystem. Cross-chain functionality made progress 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 key year for Ethereum's transition to a Layer 2-centered 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 issuance of spot ETFs in July gained a degree of institutional recognition, but Ethereum's price performance lagged significantly behind Bitcoin. The Ethereum mainnet underwent significant changes through 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 through various initiatives, including implementing Proto-Danksharding (EIP-4844), developing cross-L2 communication standards, and strengthening security requirements for Layer 2 solutions. The Layer 2 ecosystem demonstrated remarkable growth and integration throughout the year. Noteworthy new entrants enriched the ecosystem, including World Chain, Uniswap's Unichain, and Sony's Soneium. This evolution highlights Ethereum's transition from a pure execution layer to a diversified Layer 2 ecosystem providing settlement and security. Although questions remain regarding revenue models and competitive dynamics, Ethereum's continued development in developer activity and innovation in scalability solutions demonstrates its adaptability. Solana: The Third Giant 2024 witnessed a strong comeback for Solana, with a price increase of 70.8% and market value growth of 90.9%, as the coin price surpassed $260 in November, setting a new historical high. This revival began with the January Jupiter airdrop, and the Solana ecosystem activity was unprecedentedly vibrant. Solana established itself as a center for retail trading, nurturing a vibrant meme and DeFi community. Aside from mem...