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Breaking News: Major Win For Memecoins: SEC Affirms They Typically Do Not Qualify As Securities
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Breaking News: Major Win For Memecoins: SEC Affirms They Typically Do Not Qualify As Securities

Data Shows Layer-1 Price Growth Reflects Unique Address Proliferation

Reynaldo Marquez
Reynaldo Marquez
3 years ago
2 mins read
layer-1 The war on digital money continues.

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Is that time of the year again, Bitcoin seems stuck in a never ending range while Layer-1 coins and other cryptocurrencies rally. The crypto market ended 2021 with important profits, but not with the bang everyone seemed to have been expecting.

Related Reading | TA: Why Ethereum Bulls Aim Fresh Rally Above $4K

Arcane Research recorded important growth in Layer-1 coins, such as Fantom (FTM), and Avalanche (AVAX) as a result of a 2021 full of adoption. These cryptocurrencies experienced rallies over 15x against Ethereum (ETH) and took a portion of its market share.

Arcane Research claims the growing popularity in decentralized finances (DeFi), non-fungible tokens (NFTs), and the transaction fee increase on the Ethereum network. The latter phenomenon started in 2020 with the “Summer of DeFi”, the period that saw the biggest boom in DeFi users leading to an increase in network usage.

The proliferation of NFTs contributed with that issue and let layer-1 coins such as Binance Smart Chain (BSC), Solana (SOL), and others to onboard those users that were priced out of Ethereum. The same seems to be happening with Fantom and Avalanche. Arcane Research claimed the following:

As illustrated on the charts, the greater the number of users of a particular protocol, the more value it tends to attain. In other words, the hypothesis that a multi-year bear is lurking because altcoins have gone up too much requires some nuance.

layer-1 eth ftm avax
Source: Arcane Research

The explosive growth in these layer-1 coins could followed a similar path as those cryptocurrencies that benefited for a short term only to see their use base decimated, or users could form communities and become permanent contributors with their expansion. In that sense, the implementation of second layer scalability solutions for Ethereum could become a threat for those projects.

A Multi-Chain Industry Supported By Layer-1 Cryptos

A separate report by Delphi Digital records a major growth in other layer-1 projects during 2021. Terra (LUNA) was one of the most important on those terms alongside Polygon (MATIC), a scalability platform for the Ethereum ecosystem.

In terms of total value lock (TVL), Terra saw a 356x increase while Polygon experienced a 17,100x increase in its TVL. As seen below, Fantom and Avalanche entered the top 10 blockchains by TVL but with a smaller increase that the aforementioned cryptocurrencies.

Layer-1 avax eth ftm
Source: Delphi Digital via Twitter

Despite its high transaction fees, and congestion issues Ethereum remained the largest network in terms of TVL during 2021 and preserved its dominance, for the time being. When analyzing the biggest protocols by TVL, it is interesting to find Lido Finance and Multichain, as Delphi Digital claimed, two platforms with interoperable and cross-chain capabilities.

This could hint at a future where Ethereum and layer-1 coins find themselves in an equal field as users turn to the latter in search of a more cost-efficient ecosystem, and cross-chain features.

Related Reading | TA: Ethereum Plunges After Rejection: Technicals Remain Bullish

As of press time, ETH trades at $3,811 with a 1% loss in the past day.

layer-1 eth avax ftm
ETH moving sideways in the 4-hour chart. Source: ETHUSD Tradingview
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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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