Ethereum Network Accounts for Over 90% of Layer 1 Revenues in Q3

Ethereum Network Accounts for Over 90% of Layer 1 Revenues in Q3

In the ever-evolving world of cryptocurrency, one network continues to dominate. According to a recent study by Messari, the Ethereum network accounted for over 90% of Layer 1 revenues in the third quarter (Q3). While the revenue fell compared to the previous quarter, Ethereum still stood out among other protocols, with only Avalanche and Polygon experiencing steeper drops. The study also highlighted the impressive performance of the Aptos and NEAR networks, which saw significant revenue growth. Furthermore, Solana took the lead in average daily transactions, while Ethereum maintained a strong position, handling one million transactions per day. The data provides valuable insights into the cryptocurrency landscape, showcasing Ethereum’s continued influence and the diverse growth across various networks.

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Ethereum Still Dominates

While the third quarter (Q3) revenue of the Ethereum network fell by 47.3% quarter-on-quarter (QoQ), it still accounted for nearly 91% of the total revenues generated by layer 1 (L1) protocols, according to data from the latest Messari study. The data also shows that the Avalanche (58.1%) and Polygon (55.6%) networks were the only other L1s which had steeper revenue drops than the Ethereum network.

According to the Messari report, the total revenues generated by the 17 L1s that were examined were 46.7% lower or $491.5 million less. During the same period, the market capitalization of all the L1s also dropped by 9.8% to close the quarter at $272.6 billion. The Ethereum network’s dominance in the period was largely unchanged, the report added.

However, as shown by the data, the Aptos and NEAR networks had better fortunes in the quarter than the other L1s. For instance, the data shows that in the period in question, the Aptos network’s revenues were 160% higher than in the preceding quarter. This spike in revenues is attributed to the protocol’s integration of the social media platform Chingari in early July.

On the other hand, the launch of the artificial intelligence (AI)-based lock screen platform Kaikainow is said to have fueled NEAR network’s “second highest revenue growth rate at 56%.”

Revenue Comparison Among Layer 1 Networks

In terms of revenue, the Ethereum network continues to dominate the layer 1 (L1) landscape, accounting for nearly 91% of total revenues in Q3. This is a significant margin compared to other L1 protocols. While the revenue of the Ethereum network experienced a decline, it still maintained its position as the revenue leader. The Avalanche and Polygon networks were the only other L1s that experienced steeper revenue drops than Ethereum.

Aptos Network’s Revenue Spike

The Aptos network saw a substantial increase in revenue in Q3, with its revenues being 160% higher than the previous quarter. This surge in revenue can be attributed to the integration of the social media platform Chingari into the protocol. This integration likely attracted more users and increased activity on the Aptos network, resulting in higher revenues.

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NEAR Network’s Revenue Growth

The NEAR network also experienced significant revenue growth in Q3, with a growth rate of 56%. This growth can be attributed to the launch of the artificial intelligence (AI)-based lock screen platform Kaikainow on the NEAR network. The introduction of this platform likely attracted new users and increased revenue-generating activities on the NEAR network.

Solana’s Average Daily Transactions

Solana recorded the highest number of average daily transactions (ADT) among layer 1 networks in Q3, with 24.7 million transactions. This indicates a high level of activity and usage on the Solana network. The large number of transactions is likely a result of Solana’s scalability and fast transaction processing capabilities, attracting users who require high transaction throughput.

WAX’s Average Daily Transactions

WAX, another layer 1 network, recorded 17 million average daily transactions in Q3. This demonstrates a significant level of activity and usage on the WAX network. WAX’s popularity in the gaming and collectibles space may have contributed to the high number of transactions on the network.

BNB Chain’s Average Daily Transactions

The BNB Chain, the native blockchain of the Binance exchange, recorded 3.5 million average daily transactions in Q3. While this number is lower compared to Solana and WAX, it still indicates a significant level of activity on the BNB Chain. The BNB Chain’s integration with the Binance exchange likely contributes to the high number of transactions, as users engage in trading and other activities on the platform.

Polygon’s Average Daily Transactions

Polygon, an Ethereum scaling solution, recorded 2.3 million average daily transactions in Q3. Despite being a layer 2 solution built on top of Ethereum, Polygon still experiences a substantial amount of transaction activity. This can be attributed to the network’s low fees and fast transaction processing, making it an attractive choice for users seeking an efficient and cost-effective solution.

Ethereum’s Share of Total Value Locked

In terms of total value locked (TVL) in decentralized finance (DeFi), the Ethereum network continues to dominate, accounting for 82.4% of the $31.9 billion TVL in Q3. Despite the decline in TVL, Ethereum maintains its position as the preferred platform for DeFi applications and protocols. The network’s established infrastructure, vibrant ecosystem, and wide range of available applications contribute to its continued dominance in the DeFi space.

In conclusion, the Ethereum network remains the dominant player in the layer 1 landscape, accounting for the majority of revenues generated in Q3. Despite a decline in revenue, Ethereum’s position as the leading platform for decentralized applications and DeFi protocols remains unchallenged. Other layer 1 networks, such as Aptos and NEAR, have also experienced revenue growth, indicating the potential for competition in the future. Solana, WAX, BNB Chain, and Polygon have all demonstrated high levels of transaction activity, showcasing the diverse use cases and capabilities of layer 1 networks. Ethereum’s dominance in total value locked in DeFi further solidifies its position as the go-to platform for decentralized finance. As the industry continues to evolve, it will be interesting to see how these layer 1 networks adapt and compete in the rapidly changing blockchain landscape.

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