By: Stella L (stella@footprint.network)
Data source: Footprint Analytics public chain research page
In August, the cryptocurrency market was volatile, with both Bitcoin and Ethereum experiencing significant declines. Layer 1 blockchains in general suffered from the market downturn, however, Tron bucked the trend and grew strongly. In the Bitcoin Layer 2 field, the momentum was impressive, and the TVL of various scaling solutions increased significantly. At the same time, the Ethereum Layer 2 network faced great pressure, but it also continued to evolve, and the participation of heavyweight players such as Sony became a highlight of the ecosystem. Despite the shrinking market value, innovation in Bitcoin and Ethereum Layer 2 remains the key to future growth.
The data for this report comes from Footprint Analytics' public chain research page. This page provides an easy-to-use dashboard that contains the most critical statistics and indicators for understanding the public chain field and is updated in real time.
Market Overview
Both Bitcoin and Ethereum saw significant declines in August. The Bank of Japan unexpectedly announced a rate hike in late July, a move that sent ripples across markets. Strategies such as short-term volatility strategies and FX arbitrage saw returns decline significantly, leading to a significant drop in cryptocurrency values in the first week of August. Bitcoin and Ethereum both hit their lowest points of the month on August 7.
Data source: Bitcoin and Ethereum price trends
The Bank of Japan unexpectedly announced a rate hike in late July, a move that sent ripples across markets. Strategies such as short-term volatility strategies and FX arbitrage saw returns decline significantly, leading to a sharp decline in cryptocurrency values in the first week of August. Bitcoin and Ethereum both hit their lowest points of the month on August 7.
Continued selling pressure continued throughout the month, exacerbated by factors such as multiple government actions and the legacy of Mt. Gox, although the impact of these factors has gradually weakened.
Meanwhile, Ethereum is undergoing an important transition that has caused uncertainty among some investors. The blockchain plans to scale by moving more transactions to the Layer 2 network. This year, activity on the Ethereum Layer 2 network has increased significantly, with giants such as Sony launching projects such as Soneium in this ecosystem. However, the shift in activity to Layer 2 has led to a decrease in Ethereum's fee income, which could affect the value of Ether.
At the end of the month, after Telegram founder Pavel Durov was arrested in France, the market's focus increasingly turned to the relationship between blockchain technology and digital privacy. Although Federal Reserve Chairman Powell clearly "hinted" at the possibility of a rate cut in late June, market sentiment remained generally negative throughout the month.
Layer 1
As of the end of August, the total market value of blockchain cryptocurrencies fell by 12.1% compared to the end of July, set at $1.74 trillion. The market is still led by Bitcoin, Ethereum, BNB and Solana, with market shares of 67.2%, 17.4%, 4.5% and 3.6% respectively. It is particularly noteworthy that Bitcoin's market share increased by 2.4% in absolute terms, while Ethereum's market share decreased by 2.3%.
Data source: Market capitalization of public chain tokens in August 2024
Bitcoin closed at $59,017, down 8.7%. Ethereum's decline was even more pronounced, closing at $2,516, down 21.4%.
Among the top 15 chains by market capitalization, TRON is the only chain that has achieved both growth in token price and market capitalization this month, with TRON's price rising by 23.1% and its market capitalization increasing by 22.7%. In contrast, other chains are showing a downward trend.
Data source: Public chain token price and market value at the end of August 2024
Tron has stood out amid market volatility, thanks to riding on the Meme craze, triggering a surge in on-chain activity. The launch of SunPump, the first Meme fair launching platform on Tron, has significantly increased user participation.
The BNB chain has also introduced new policies and incentives to promote on-chain meme-related activities, with Simon’s Cat, TOkenFi, and FLOKI leading in terms of trading volume in the past 30 days.
Data source: BNB chain popular Memecoins
Additionally, several major financial institutions expanded their blockchain portfolios this month. Top asset manager Franklin Templeton expanded its blockchain fund to include Avalanche. Meanwhile, Grayscale Investments launched the Avalanche Trust and a new Sui fund.
As of the end of August, the total TVL in the DeFi space was $64 billion, down 16.8% from the end of July.
Data source: TVL of public chains at the end of August 2024
Among the top 15 chains by TVL, Sui is the only one to achieve growth, with a monthly growth rate of 41.8%. NAVI Protocol, the largest DeFi project on Sui, provides lending and liquid staking products. Its TVL surged 72.0%, from $140 million on August 1 to $230 million at the end of August.
Although Polygon’s TVL dropped 1.3% from July, prediction market Polymarket attracted a lot of attention. Affected by the US election cycle, Polymarket’s monthly trading volume increased by 22.2% month-on-month to $470 million, and the number of traders soared by 46.1% to 83,000. Polymarket’s TVL increased by 19.6% in August to $110 million, ranking third on the Polygon chain, behind AAVE and Uniswap. However, 78.0% of Polymarket’s total trading volume is election-related, raising questions about whether it can maintain this growth after the US election.
Data source: Polymarket data dashboard
Meanwhile, Telegram founder Pavel Durov was arrested in France, which had a direct impact on TON’s performance. In August, TON’s TVL plummeted by 53.1%, and institutional investors withdrew to avoid potential risks.
Bitcoin Layer 2
As of August 31, the TVL of Bitcoin Layer 2 (including sidechains) reached US$1.09 billion, a 5.8-fold increase since January 1, 2024, and an astonishing 18.7-fold increase since January 1, 2023.
Bitlayer leads the field, capturing 32.7% of the total TVL, followed by Core at 16.3%, Rootstock at 14.6%, and Merlin at 12.0%.
Data source: Bitcoin Ecosystem Public Chain TVL
Looking at individual DeFi projects on a single chain, the top 10 projects account for 64.6% of the total TVL, among which Avalon Finance (Bitlayer), Pell Network (Core) and MoneyOnChain (Rootstock) are at the top, accounting for 16.7%, 7.2% and 6.6% respectively.
Data source: Bitcoin Ecosystem Public Chain TVL
When considering the multi-chain TVL of the projects, Pell Network operates on seven chains and leads with a 22.9% market share, while Avalon Finance operates on three chains and follows with a 22.8% market share. The top 10 projects together account for 77.5% of the total market share.
Data source: Bitcoin DeFi project TVL (multi-chain summary)
Ethereum Layer 2
As mentioned earlier, Ethereum faced many challenges in August, and its Layer 2 network was no exception.
Arbitrum One, Optimism, and Base continued to dominate in terms of TVL market share, holding 50.2%, 20.0%, and 8.2% respectively, with little change in TVL compared to the previous month.
DeGate's TVL increased significantly by 20.6%, Scroll's by 7.4%, and Taiko's by 7.1%. However, Blast dropped by 18.8% and zkSync dropped by 8.8%.
Data source: Ethereum Layer 2 Overview in August 2024 - Rollups (Bridge Related Indicators)
Overall, user activity on Ethereum Layer 2 remains sluggish, suggesting that a new round of innovation and more attractive applications are needed to re-attract users. Against the backdrop of Bitcoin Layer 2’s strong performance this year, the Ethereum Layer 2 ecosystem may need new narratives and stronger user engagement to regain momentum.
Soneium has become a hot topic this month. On August 23, Sony Blockchain Solutions Labs, jointly initiated by Sony Group and Startale Labs, announced the launch of Soneium, a new Layer 2 network based on Ethereum. The network will use Optimism's OP Stack technology, spanning the fields of gaming, entertainment and finance, combining Web3 innovation with consumer applications.
Soneium
In the week following the announcement, Soneium has made rapid progress, including the launch of the “Minato” testnet, the launch of the “Soneium Spark” program for developers, and a partnership with Transak to provide global fiat onboarding services. As industry giants like Sony continue to enter the blockchain space, there is growing optimism about bringing more users into the Web3 ecosystem.
Blockchain Games
In August, a total of 1,492 games were active on various blockchain networks, down 5.45% from July. BNB Chain, Polygon, and Ethereum led the market with 20.2%, 17.4%, and 17.0% market share, respectively.
Ronin, opBNB, Nebula (SKALE subnet), and NEAR performed well in terms of DAUs, averaging 1.34 million, 691,000, 349,000, and 321,000 respectively during the month. As of the end of August, these chains accounted for 28.0%, 23.8%, 8.8%, and 6.6% of the DAU market share, respectively.
Data source: Daily active users of various public chain blockchain games
Ronin's DAU market share continued to decline during August, from 38.1% on August 1 to 28.0% on August 31. Despite this, Ronin's average DAU in August was still nearly twice that of opBNB, which followed closely behind. This downward trend was mainly caused by the performance of the game Lumiterra, whose DAUs dropped from 600,000 at the beginning of the month to 150,000 at the end of the month.
Additionally, on August 6, the Ronin cross-chain bridge was suspended due to a white hat hacker attack that exposed a critical misconfiguration in the cross-chain bridge upgrade proposal. Approximately $12 million worth of cryptocurrency was transferred. Although the issue was quickly resolved and all funds were recovered, the incident had a certain impact on the activities of the Ronin ecosystem.
Conversely, opBNB’s DAU share rose from 17.5% to 23.8% in August. Its market share as of August 31 nearly doubled from 13.1% on July 1. SERAPH: In The Darkness, a game launched on opBNB in mid-July, has gained significant traction, growing from 187,000 DAUs on August 1 to 515,000 by the end of the month.
Nebula’s market share also increased, from 7.6% to 8.8%. As a SKALE subnet that uses the “zero gas fee” model, Nebula’s growth was driven by games such as Yomi Block Puzzle, moteDEX, and Haven’s Compass.
Financing
In August, there were 12 financing events in the public chain field, with a total amount of US$118 million, an increase of 20.1% from July. It is worth noting that four of the financing events did not disclose the specific amount.
Public chain financing events in August 2024 (data source: crypto-fundraising.info)
The increase in total funding this month was mainly due to one major funding event. July’s largest funding round was Caldera’s $15 million Series A, while August was significantly boosted by Story Protocol’s $80 million Series B.
PIP Labs, a core contributor to Story Protocol, received this financing with the support of venture capital giant Andreessen Horowitz (a16z). Story Protocol aims to revolutionize intellectual property management by transforming intellectual property (IP) into modular, programmable "IP Lego". These assets can be authorized, managed, and monetized through smart contracts on the blockchain. Story Protocol gives creators the ability to embed licensing and royalty terms directly into their intellectual property, allowing for greater control over their data. The project's mainnet is expected to go live later this year, which has aroused great anticipation.
Story Protocol
In addition to Story Protocol, three other Layer 1 blockchains, including Quai Network, U2U Network, and Particle Network, received new financing in August. On the Layer 2 side, multiple projects also successfully raised funds, including Bitcoin Layer 2’s Ark and Nexio, Ethereum Layer 2’s Essential, Corn, and Reddio, Solana Layer 2’s Soon, and other Layer 2 projects such as Rivalz Network and Lync.
One emerging trend worth noting is the increasing attention paid to Move Stack. Two Layer 2 blockchains, Nexio and Lync, powered by Move Stack, completed a new round of financing this month.
