Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesBotsEarnCopy
Layer 1 blockchains face slowdown in 2024 with lower activity

Layer 1 blockchains face slowdown in 2024 with lower activity

GrafaGrafa2024/09/05 06:55
By:Liezl Gambe

Layer one (L1) blockchain networks like Ethereum (CRYPTO:ETH), Solana (CRYPTO:SOL), and Bitcoin (CRYPTO:BTC) are seeing a significant dip in activity and market performance this year, according to a new report by Coin Metrics researchers Tanay Ved and Matías Andrade.

The report shows that transaction volumes are down, and total fees collected by these networks have dropped sharply from their highs earlier in the year.

Ethereum, Solana, and Bitcoin, which started 2024 on a strong note, have struggled to maintain momentum.

Data indicates that year-to-date returns for most L1 tokens have slipped below 50%.

Ethereum's total fees have fallen to $1.15 million, while Solana and Bitcoin have recorded even lower figures at $724,000 and $463,000, respectively.

The slowdown in transaction volumes is a key factor driving these declines.

The drop in activity is not just about fees.

The broader market for L1 networks is seeing a consolidation that is affecting token prices and overall market sentiment.

Solana, which had gained traction for its high-speed transactions, enjoyed early gains but has faced a steep decline as the market cooled.

Ethereum, despite its much-talked-about move to proof-of-stake with the Merge, is also feeling the impact of less network activity.

Ved and Andrade's report explains that “low-fee networks like Solana are optimised and primarily used for high-frequency, low-value transactions,” yet even these networks are seeing reduced activity.

The competition among L1 blockchains has fueled rapid advancements—Ethereum’s switch to proof-of-stake, Solana’s push for speed, and Avalanche’s customizable subnets.

But these upgrades haven’t been enough to sustain high levels of activity across the board.

The Coin Metrics report also touches on the importance of fee mechanisms for the sustainability of L1 networks.

Fees paid in native tokens are vital for keeping validators and miners engaged.

Even with the decline in fee income, networks like Ethereum are focused on making improvements to drive future growth.

Efforts like lowering layer two (L2) transaction fees and introducing new features like blobs are designed to boost accessibility and performance, positioning Ethereum for potential surges in activity down the line.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

38% Dogecoin Rebound, Cardano Tests AI Limits, But Unstaked’s AI Advantage Steals the Show

Dogecoin (DOGE) jumps 38%, and Cardano (ADA) launches an AI testnet, but Unstaked’s advanced AI agents go beyond marketing, offering real impact and value.Dogecoin (DOGE) Future: Aiming for $3.94 with MomentumCardano (ADA) Blockchain Tests AI ScalabilityUnstaked: AI That Goes Beyond MarketingFinal Take: Real AI Utility vs. Hype

Coinomedia2025/05/08 21:11
38% Dogecoin Rebound, Cardano Tests AI Limits, But Unstaked’s AI Advantage Steals the Show

ETH Trades at Historic Lows vs BTC Since 2019

ETH hits lowest value compared to BTC since 2019, raising questions on a potential rebound amid mixed fundamentals.ETH Undervalued Against BTC: A Historical SetupBullish History, Bearish FundamentalsPatience Required for Ethereum Bulls

Coinomedia2025/05/08 21:11
ETH Trades at Historic Lows vs BTC Since 2019

Popcat Climbs, Dogecoin Stalls, But BTFD Triples Tokens with 200% Bonus—Best Meme Coin Presale to Buy Now Before May 26 DeadlineConclusion: Don’t Mis

BTFD Coin surges in Stage 15 with 90% APY staking and 200% bonus. Best meme coin presale to buy now before it launches on May 27!BTFD Coin (BTFD) – The Bulls Are Charging, Are You In?Dogecoin (DOGE) – The OG Meme King Facing Shaky GroundPopcat (POPCAT) – The Smart Money Magnet of the Moment

Coinomedia2025/05/08 21:11
Popcat Climbs, Dogecoin Stalls, But BTFD Triples Tokens with 200% Bonus—Best Meme Coin Presale to Buy Now Before May 26 DeadlineConclusion: Don’t Mis

SHIBA’s Hype Fades, ADA Devs Work; Meanwhile, Web3 ai Becomes Highest Trending Crypto With $500K Frenzy

Explore Shiba Inu (SHIBA) recovery trends, Cardano (ADA) prediction backed by developer growth, and how Web3 ai’s Portfolio Optimizer replaces guesswork with smart strategy. Learn why Web3 ai is gaining traction among the highest trending crypto tools.Web3 ai’s Portfolio Optimizer Turns Guesswork Into GainsShiba Inu (SHIBA) Recovery Sparks Renewed Interest After Key Price ReboundCardano (ADA) Prediction: Development Surge Fuels Bullish OutlookStrategy Over Speculation

Coinomedia2025/05/08 21:11
SHIBA’s Hype Fades, ADA Devs Work; Meanwhile, Web3 ai Becomes Highest Trending Crypto With $500K Frenzy