Original author: Footprint
Translation by: Lawrence, Mars Finance.
2024 marks a significant watershed for the public chain industry, with the industry focus shifting from technical competition to practical applications. In this year, the public chain market capitalization grew by 105.3% to reach $2.8 trillion, Bitcoin's price broke through $100,000, and institutional-level adoption was achieved through ETFs, Ethereum Layer 2 networks expanded to over 200 chains, and Bitcoin Layer 2 TVL grew by 1,277.6%, all showcasing the industry's transition from technical experimentation to practical real-world applications. The public chain industry is undergoing a gradual shift from a technology-driven development approach to an application-demand-driven development approach.
Note: Unless otherwise stated, 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 several key indicators showing significant expansion.
The total market capitalization of public chains grew by 105.3% to reach $2.8 trillion. Bitcoin's dominance rose to 69.8%, while Ethereum's share dropped from 20.4% to 15.2%. The shares of BNB Chain and Solana stabilized at 3.5% and 3.3%, respectively, while other platforms accounted for 8.1%.
The DeFi sector also showed strong growth momentum in 2024, with total locked value (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, both Tron and Avalanche saw declines in their TVL.
The Ethereum Layer 2 ecosystem experienced significant centralization trends in 2024. Arbitrum maintained its leading position with a TVL of $10.6 billion, 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 $5.8 billion TVL (22.5% share), while Optimism ranked third with $4 billion TVL (15.8%). Together, these three platforms accounted for 79.1% of Ethereum L2 DeFi TVL, while previous competitors like Blast, zkSync, and Starknet all saw declines in market share.
Meanwhile, the ecosystem continues to expand, with 50 Rollups and 70 Validium & Optimium currently running 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, with total locked value reaching $2.6 billion, a substantial increase of 1,277.6% compared to 2023. Core leads with $790 million TVL (30.3% market share), followed by Bitlayer ($500 million, 19.4% share) and BSquared ($330 million, 12.7% share). This growth is not only reflected in TVL but also in the number of active chains, which more than doubled over the year, with nearly 20 chains now in existence.
Competitive landscape: Leaders and challengers.
In 2024, the competitive landscape of public chain ecosystems underwent significant changes, mainly 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 exceptional growth in 2024, with a price increase of 129.2% and a market capitalization growth of 131.7%. This growth was driven by institutional adoption of spot ETFs, the April halving event, and positive sentiment following the U.S. elections. Besides breaking through the $100,000 price milestone, there were two key developments in the Bitcoin ecosystem:
Institutional adoption has increased: The successful issuance of spot ETFs in January has completely changed the institutional entry landscape, with BlackRock's product rapidly reaching $20 billion in scale. Bitcoin has surpassed silver and Saudi Aramco to become the seventh largest asset globally, marking the transition from a speculative asset to a recognized store of value.
The rise of BTCfi: The Bitcoin ecosystem has achieved expansion beyond price growth through innovative financial products. Babylon's Bitcoin staking project, Solv Protocol's cross-chain solutions, and Core's Fusion upgrade all demonstrate an increasingly mature ecosystem. Cross-chain capabilities have made progress through integrations like BOB network with Optimism and BEVM's 'Super Bitcoin' framework, although standardization still faces challenges.
Ethereum: Layer 2 drives ecosystem evolution.
2024 is a key year for Ethereum's transformation into a Layer 2-centric ecosystem. Despite a price increase of 55.8% to $3,744, Ethereum faces complex challenges of repositioning its role and maintaining relevance against the backdrop of Layer 2 adoption growth. The successful issuance of a spot ETF in July gained some degree of institutional recognition, but Ethereum's price performance has lagged significantly behind Bitcoin.
Ethereum's mainnet achieved significant transformation through the 'Cancun Upgrade,' successfully reducing Layer 2 transaction costs and enhancing scalability. However, the migration of activity to Layer 2 has led to a decline in Ethereum's own fee revenue, raising discussions about Ethereum's long-term sustainability. The Ethereum Foundation has 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 has shown significant growth and integration throughout the year. Notable newcomers have enriched the ecosystem, including World Chain, Unichain from Uniswap, and Sony's Soneium. This evolution highlights Ethereum's shift from a pure execution layer to a diversified Layer 2 ecosystem focused on settlement and security provision. Despite uncertainties around revenue models and competitive dynamics, Ethereum's ongoing development in developer activity and innovation in scaling solutions demonstrates its adaptability.
Solana: The third giant.
2024 witnessed a strong comeback for Solana, with a price increase of 70.8% and a market capitalization growth of 90.9%, as the price surged to over $260 in November, setting a new all-time high. This revival began with the January Jupiter airdrop, making the Solana ecosystem more active than ever. Solana has established itself as a center for retail trading, nurturing a vibrant meme and DeFi community. In addition to meme culture, Solana has made progress in several areas: re-staking protocols, modular Layer 2 solutions, and stablecoin innovations. The ecosystem has further extended its influence through the expansion of SVM chains like Eclipse, Soon, Atlas, and Sonic.
The rise of emerging forces: TON, Sui, and Base.
TON: Social integration drives platform growth.
The Open Network (TON) showed significant growth in 2024, with Toncoin's price increasing by 149.6% and market capitalization growing by 84.3%. TON's success primarily stems from its deep integration with Telegram, effectively bridging the gap between traditional social networks and blockchain technology. The platform simplifies 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 large-scale adoption.
Sui: From Move language pioneer to ecosystem leader.
Sui performed exceptionally well, with token prices 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 sectors, including Telegram game integration and innovative SuiPlay0X1 game console development, demonstrating a comprehensive layout for ecosystem growth. The platform's emphasis on user experience and protocol development has created positive network effects, attracting joint participation from developers and users.
Base: Institutional background drives rapid growth.
The significant growth of Base is driven by several key factors. Coinbase has significantly lowered the entry barrier for mainstream users through its user-friendly smart wallet. The platform has gained substantial momentum from successful social applications like friend.tech and Clanker, while the popularity of memecoins has further boosted activity on Base. The implementation of the 'Cancun Upgrade' has significantly reduced transaction fees, continuously enhancing Base's appeal to developers and users.
Key trends in the public chain industry for 2024.
New chains are emerging endlessly.
In 2024, projects are launching their own public chains one after another. DeFi giant Uniswap announced Unichain; the gaming platform Treasure DAO is developing a ZK-based Layer 2; the NFT space saw Pudgy Penguins launch Abstract; and the Web3 platform Galxe introduced 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.
Changes in institutional participation methods.
2024 marks a decisive shift in institutional adoption from experimental blockchain initiatives to strategic implementation. Financial institutions are leading this transformation, with BlackRock's Bitcoin ETF rapidly reaching $20 billion, and PayPal expanding PYUSD to Solana. Tech giants are demonstrating deeper participation through innovative means: Sony launched the Soneium chain for entertainment applications, while Google Cloud expanded its Web3 portal services. Infrastructure development has been particularly notable, with Circle launching native USDC on Sui and Visa integrating Solana for settlements.
Change in institutional investment paradigms.
The public chain sector showed a strong recovery in 2024, with 174 funding events raising a total of $1.7 billion, a 137.1% increase from the previous year. Notably, institutional investment strategies have shifted from pure infrastructure to application-oriented innovations. Early-stage investment events accounted for 21.4% of total funding event counts, while Series A and B rounds made up 31.8%, reflecting the increasing maturity of the ecosystem.
The investment philosophy of venture capital has undergone a significant evolution, prioritizing user-oriented applications over traditional infrastructure development. This is evident in the large 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 technical competition to application innovation.
The public chain industry underwent a fundamental transformation in 2024, shifting from a technology-driven approach to an application-driven strategy. This transition challenges the previous industry mindset of 'build first, users will come.' Despite significant improvements in technical capabilities, the increased network capacity has not directly translated into corresponding user growth. For example, despite hardware limitations, Ethereum's base layer has a higher 'users processed per second' (UOPS) than most Layer 2s, highlighting the complex relationship between technical capabilities and actual adoption.
This reality has prompted the ecosystem to make a strategic shift. Blockchain platforms are increasingly focusing on identifying specific user needs and building targeted solutions, rather than pursuing pure technological advancement. This 'finding users before building' approach is reflected in several successful initiatives. The integration of social finance has proven to be a particularly effective strategy, with TON's integration with Telegram and Base's friend.tech demonstrating how familiar social platforms can drive blockchain adoption. Simplifying user experience through account abstraction and familiar authentication methods has significantly lowered the entry barrier for mainstream users.
The evolution of meme culture in the blockchain space further reflects this shift towards application-oriented development. Initially purely speculative activities have transformed into effective user acquisition channels, particularly on platforms like Solana and Base. These networks have successfully leveraged meme-related initiatives to drive ecosystem growth while establishing sustainable community engagement. The success of these user-centered approaches indicates that sustainable growth in the blockchain space increasingly relies on understanding and serving user needs, rather than merely advancing technical capabilities.
Outlook for 2025.
As the blockchain industry shifts from technical experimentation to practical implementation, 2025 is expected to be a significant year of transformation.
Regulatory clarity.
The regulatory environment shows significant hope for improvement, especially in the United States. A clearer regulatory framework is expected to benefit the entire industry, particularly with the progress of stablecoin legislation. This regulatory clarity will facilitate increased blockchain adoption by institutions through regulated products and services, while also fostering competition in crypto regulation across jurisdictions.
Public chain specialization.
Public chain specialization has become a dominant trend, shifting from general Layer 1 competition to purpose-driven architectures. Supported by cross-chain infrastructure, application-specific chains and optimized execution environments will see significant growth. The 'Rollup as a Service' (RaaS) sector is expected to expand, providing more convenient customized blockchain solutions for enterprises and project parties.
Technological innovation and AI integration.
In 2025, technological innovation will shift from purely breakthrough developments 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 bring a more intuitive user experience; and the standardization of cross-chain communication will simplify interoperability.
At the infrastructure level, we expect to see more developments driven by actual demand. The modular blockchain technology stack will mature, providing specialized solutions for data availability, settlement, and execution layers. Notably, the deep integration of AI technology with blockchain will reshape infrastructure forms: from improving user interfaces to realizing 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 round of blockchain innovation.
Conclusion
The past year has proven that sustainable growth relies not only on technical capabilities but also on meaningful user adoption and practical utility. With increased regulatory clarity, advancements in technological infrastructure, and greater institutional participation, the groundwork for achieving 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 transformation will define the next phase of industry growth in 2025.
