2024 symbolizes an important watershed moment for the public chain industry, as the focus shifts from technical competition to practical application implementation. In this year, the market capitalization of public chains grew by 105.3% to reach $2.8 trillion, Bitcoin's price surpassed $100,000, and institutional adoption was achieved through ETFs. The Ethereum Layer 2 network expanded to over 200 chains, and Bitcoin Layer 2 TVL grew by 1,277.6%, demonstrating the industry's shift from technical experimentation to practical real-world applications. The public chain industry is undergoing a transition from being driven by technology to being driven by application needs.
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.
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 market share decreased from 20.4% to 15.2%. The market shares of BNB Chain and Solana remained stable at 3.5% and 3.3%, respectively, while other platforms accounted for 8.1%.
Source: Footprint Analytics
The DeFi sector also demonstrated strong growth momentum in 2024, with total locked value (TVL) reaching $102.8 billion by year-end, a year-on-year growth of 88.6%. Among the top 10 public chains by TVL, Bitcoin and $TON showed 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 saw declines in TVL.
Source: Footprint Analytics
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 a dark horse for the year, jumping to second place with a TVL of $5.8 billion (22.5% market share), while Optimism ranked third with a TVL of $4 billion (15.8%). Together, these three platforms accounted for 79.1% of the Ethereum L2 DeFi TVL, whereas previous competitors like Blast, zkSync, and Starknet saw their market shares decline.
At the same time, the ecosystem continues to expand in scale, with 50 Rollups and 70 Validium & Optimium running on the mainnet, along with about 90 upcoming chains, bringing the total number of Ethereum L2 chains to over 200.
Source: Footprint Analytics
The Bitcoin Layer 2 and sidechain ecosystem experienced explosive growth, with total locked value reaching $2.6 billion, significantly growing by 1,277.6% from 2023. Core led with a TVL of $790 million (30.3% market share), followed by Bitlayer ($500 million, 19.4% market share) and BSquared ($330 million, 12.7% market share). This growth is not only reflected in TVL, as the number of active chains also more than doubled throughout the year, with nearly 20 existing chains.
Source: Footprint Analytics
Competitive Landscape: Leaders and Challengers
In 2024, the competitive landscape of public chain ecosystems underwent significant changes, primarily characterized by the strengthening of Bitcoin's dominance, the revival 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 market capitalization 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 breaking the $100,000 price milestone, two key developments in the Bitcoin ecosystem occurred:
Institutional adoption has increased: The successful launch of spot ETFs in January fundamentally changed the institutional access landscape, with BlackRock's product quickly reaching $20 billion. Bitcoin surpassed silver and Saudi Aramco to become the seventh-largest asset globally, symbolizing a transition from a speculative asset to a recognized store of value.
The rise of BTCfi: The Bitcoin ecosystem has achieved functionality 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 the increasingly mature ecosystem. Cross-chain functionality has progressed through the integration of the BOB network with Optimism and the BEVM's 'super Bitcoin' architecture, though 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 in repositioning and maintaining relevance amid the growth of Layer 2 adoption. The successful launch of spot ETFs in July received a certain degree of institutional recognition, but Ethereum's price performance has clearly lagged behind Bitcoin.
The Ethereum mainnet achieved 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, sparking discussions about Ethereum's long-term sustainability. The Ethereum Foundation has responded with multiple initiatives, including the implementation of Proto-Danksharding (EIP-4844), developing cross-L2 communication standards, and strengthening security requirements for Layer 2 solutions.
The Layer 2 ecosystem exhibited significant 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 shift from a purely execution layer to a diversified Layer 2 ecosystem that provides settlement and security. Although revenue models and competitive dynamics still raise questions, Ethereum's ongoing development in developer activity and scalable solution innovations 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%. In November, the coin price broke $260, setting a historical high. This revival began with the January Jupiter airdrop, and Solana's ecosystem activity was unprecedentedly vibrant. Solana established itself as a center for retail trading, nurturing a vibrant meme and DeFi community. In addition to meme culture, Solana made progress in multiple industries: re-staking protocols, modular Layer 2 solutions, and stablecoin innovations. The ecosystem further extended its influence through the expansion of SVM chains like Eclipse, Soon, Atlas, and Sonic.
The Rise of Emerging Forces: TON, Sui, and Base
TON: Social Integration Drives Platform Growth
The Open Network ($TON) exhibited significant growth in 2024, with Toncoin prices rising by 149.6% and market capitalization growing by 84.3%. TON's success primarily stems from its deep integration with Telegram, effectively bridging traditional social networks and blockchain technology. The platform simplifies the crypto experience through Telegram wallet functionality and blockchain integration, providing millions of users with easy access to gaming, memes, and DeFi applications, establishing a paradigm model for large-scale adoption.
Sui: From Move Language Pioneer to Ecosystem Leader
Sui performed impressively, with token prices soaring by 461.6% and market capitalization growing by 1,363.8%. This success reflects the market's confidence in the Move language technology and ecosystem development. Sui focuses on the DeFi and gaming industries, including Telegram game integration and the innovative SuiPlay0X1 gaming console development, demonstrating 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.
Source: Footprint Analytics
Base: Institutional Background Drives Rapid Growth
The significant growth of Base is driven by multiple key factors. Coinbase has 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 meme coins further boosted activity on the Base chain. The implementation of the 'Cancun Upgrade' significantly reduced transaction fees, continuously enhancing Base's appeal to developers and users.
Major Trends in the Public Chain Industry in 2024
New chains are emerging continuously.
In 2024, projects have launched their own public chains. DeFi giant Uniswap announced Unichain; the gaming platform Treasure DAO developed a ZK-based Layer 2; the NFT industry saw Pudgy Penguins launch Abstract; and Web3 platform Galxe launched Gravity. Furthermore, 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
Transformation in Institutional Participation
2024 symbolizes a decisive shift in institutional adoption from experimental blockchain initiatives to strategic implementation. Financial institutions lead this transformation, with BlackRock's Bitcoin ETF rapidly reaching $20 billion, and PayPal expanding PYUSD functionality to Solana. Tech giants are showcasing deeper involvement through innovative means: Sony launched the Soneium chain for entertainment applications, while Google Cloud expanded its Web3 portal services. Infrastructure development, in particular, is noteworthy, with Circle launching native USDC on Sui and Visa integrating Solana for settlements.
Changing the Institutional Investment Paradigm
The public chain industry demonstrated a strong recovery in 2024, with 174 funding events raising a total of $1.7 billion, a growth of 137.1% compared to last year. Notably, institutional investment strategies shifted from purely infrastructure-focused to application-oriented innovations. Early investment events accounted for 21.4% of total funding events, while Series A and B rounds accounted for 31.8%, reflecting an increasingly mature ecosystem.
Source: Footprint Analytics
The investment philosophy of venture capital has undergone a significant evolution, prioritizing user-facing applications over traditional infrastructure development. This is reflected in 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.
Source: Footprint Analytics
From Technical Competition to Application Innovation
The public chain industry experienced a fundamental shift in 2024, moving from a technology-driven approach to an application-driven strategy. This shift challenged the previously dominant industry mindset of 'build first, users will naturally come.' Despite significant enhancements in technical capabilities, the increased network capacity did not directly translate into corresponding user growth. For example, despite 'hardware limitations,' the Ethereum base layer has a higher 'users processed per second' (UOPS) than most Layer 2s, highlighting the complex relationship between technical capability and actual adoption.
This reality has prompted the ecosystem to make a strategic shift. Blockchain platforms are increasingly focused on identifying specific user needs and building targeted solutions, rather than pursuing pure technical advancements. This 'build after finding users' approach is reflected in several successful initiatives. Social finance integration has proven to be a particularly effective strategy, with TON's Telegram integration and Base's friend.tech showcasing how familiar social platforms can drive blockchain adoption. By simplifying user experiences through account abstraction and familiar authentication methods, the barriers to entry for mainstream users have been significantly lowered.
The evolution of meme culture in the blockchain industry further reflects this shift towards application-oriented development. Initially purely speculative activities have evolved 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 the sustainable growth of the blockchain industry increasingly relies on understanding and serving user needs, rather than purely advancing technical capabilities.
2025 Outlook
As the blockchain industry shifts from technical experimentation to practical implementation, 2025 is expected to be a significant transformative year.
Regulatory Clarity
The regulatory environment shows significant promise for improvement, particularly in the United States. A clearer regulatory framework is expected to benefit the entire industry, especially with the progress in stablecoin legislation. This regulatory clarity will promote institutional adoption of blockchain through the increase of regulated products and services while fostering competition in cryptocurrency regulation across jurisdictions.
Public Chain Specialization
Public chain specialization has become the dominant trend, shifting from generic Layer 1 competition to purpose-driven architectures. Supported by cross-chain infrastructure, application-specific chains and optimized execution environments will see significant development. The 'Rollup as a Service' (RaaS) industry is expected to expand, providing enterprises and projects 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 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 real 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 form of infrastructure: from improving user interfaces to enabling complex on-chain AI agents, from decentralized model training to supporting social finance integration, these innovations will provide support for 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 technical capabilities but also on meaningful user adoption and real utility. With increased regulatory clarity, advancements in technical 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 shift will define the next phase of industry growth in 2025.
This article is authorized to be reproduced from: (Foresight News)
Original author: Siddhant Kejriwal
'2024 marks a major turnaround in the public chain industry! From infrastructure competition to application breakthroughs, Layer 2 experiences explosive growth.' This article was first published in 'Crypto City.'
