August 2024 Chains Report
Author: Stella L (stella@footprint.network)
Data Source: Footprint Analytics Chains Research Page
August saw significant turbulence in the cryptocurrency market, with Bitcoin and Ether both facing sharp declines. Layer 1 blockchains experienced a market-wide downturn, though Tron stood out with span growth. In the Bitcoin Layer 2 space, there was impressive expansion, as TVL surged across scaling solutions. Meanwhile, Ethereum Layer 2 networks continued to evolve, with notable developments like Sony’s entry into the ecosystem. Despite challenges in DeFi and market cap declines, innovation in both Bitcoin and Ethereum Layer 2s remains a focal point for future growth.
Data for this report was obtained from Footprint Analytics’ Chains Research Page, an easy-to-use dashboard containing the most vital stats and metrics to understand the public chain industry, updated in real-time.
Monthly Market Overview
August was a challenging month for Bitcoin and Ether, both experiencing sharp declines. The Bank of Japan’s decision to raise its key interest rate at the end of July sent shockwaves through global markets, including cryptocurrencies. Strategies like short volatility and FX carry trades saw significant losses, contributing to the sharp drop in cryptocurrency valuations during the first week of August. Bitcoin and Ether both hit their monthly lows on August 7.
Source: BTC Price & ETH Price
Selling pressure persisted, driven by multiple factors, including government interventions and activity from the Mt. Gox estate. However, these influences gradually waned as the month progressed.
Ethereum is also navigating a pivotal shift, introducing uncertainty among investors. The blockchain is focusing on scaling by offloading more transactions to Layer 2 networks, where activity has surged. Major players like Sony have entered the space with projects like Soneium, capitalizing on Ethereum’s evolving ecosystem. However, this migration of activity to Layer 2s has resulted in lower fee revenue for Ethereum, potentially impacting the value of Ether.
Toward the end of August, attention increasingly focused on the intersection of blockchain technology and digital privacy, following the arrest of Telegram founder Pavel Durov in France. While U.S. Fed Chair Powell hinted at a potential rate reduction, market sentiment remained predominantly negative throughout the month.
Layer 1
By the end of August, the total market cap of blockchain cryptocurrencies fell by 12.1% compared to July, settling at $1.74 trillion. The market continued to be dominated by Bitcoin, Ethereum, BNB Chain, and Solana, which held market shares of 67.2%, 17.4%, 4.5%, and 3.6%, respectively. Notably, Bitcoin’s market share grew by 2.4%, while Ethereum’s declined by 2.3%.
Source: Chain Token Market Cap Share
Bitcoin closed the month at $59,017, a 8.7% drop. Ether followed a steeper downward trajectory, finishing at $2,516, a sharp 21.4% decrease.
Among the top 15 chains by market cap, Tron was the only one to experience growth in both token price and market cap in August, with TRON’s price increasing by 23.1% and its market cap by 22.7%. In contrast, other top chains followed a downward trend.
Source: Chain Token Market Cap and Price
Tron stood out amid market volatility by capitalizing on Meme hype, which sparked a surge in on-chain activity. The launch of SunPump, the first Meme fair launch platform on Tron, significantly boosted user engagement.
BNB Chain also introduced new policies and incentives to encourage Meme-related activity on-chain, with Simon's Cat, TOkenFi, and FLOKI leading the trading volume in the past 30 days.
Source: Top Memecoins on BNB Chain
In addition to these trends, several major financial institutions expanded their blockchain portfolios this month. Leading asset manager Franklin Templeton expanded its blockchain fund to include Avalanche, while Grayscale Investments launched an Avalanche Trust and a new Sui fund.
By the end of August, the total TVL in the DeFi sector stood at $64.0 billion, marking a 16.8% decline from July.
Source: Chain TVL Ranking
Among the top 15 chains by TVL, Sui was the only one to register growth, with a 41.8% increase over the month. NAVI Protocol, Sui’s largest DeFi project, which exclusively operates on the chain, offers lending and liquid staking products. Its TVL surged by 72.0%, growing from $136.1 million on August 1 to $234.1 million by the end of the month.
Although Polygon’s TVL saw a slight 1.3% decline from July, the prediction market Polymarket gained significant attention. Driven by anticipation of the upcoming U.S. presidential election, Polymarket’s monthly trading volume increased by 22.2% to $472.9 million, while its number of traders surged by 46.1% to 82.8K. Polymarket’s TVL rose by 19.6% during August, reaching $106.5 million, ranking third on Polygon after AAVE and Uniswap. However, 78.0% of Polymarket’s total trading volume was election-related, raising questions about whether it can sustain this growth post-election.
Source: Polymarket Dashboard
Meanwhile, the arrest of Telegram founder Pavel Durov in France had a direct impact on TON’s performance. TON’s TVL plummeted by 53.1% in August as institutional investors exited to avoid potential risks.
Bitcoin Layer 2
As of August 31, TVL across Bitcoin Layer 2s and sidechains reached $1.09 billion, marking a 5.8x increase since January 1, 2024, and an impressive 18.7x growth since January 1, 2023.
Bitlayer leads the sector, holding 32.7% of the total TVL, followed by Core at 16.3%, Rootstock at 14.6%, and Merlin Chain at 12.0%.
Source: Bitcoin Scaling Chain TVL
Looking at individual DeFi projects on single chains, the top 10 accounted for 64.6% of the total TVL, with Avalon Finance (on Bitlayer), Pell Network (on Core), and MoneyOnChain (on Rootstock) leading the way, capturing 16.7%, 7.2%, and 6.6% of the market, respectively.
Source: Bitcoin Scaling Chain TVL
When considering projects’ TVL across multiple chains, Pell Network, which operates on seven chains, led with a 22.9% market share, while Avalon Finance, spanning three chains, was a close second at 22.8%. The top 10 cross-chain projects collectively held 77.5% of the total market share.
Source: BTC DeFi Projects TVL Across Chains
For deeper insights into Bitcoin Layer 2s, refer to our latest joint report with CoinMarketCap: BTCFi: Analyzing Bitcoin DeFi Ecosystem Through On-chain Data.
Ethereum Layer 2
As mentioned earlier, Ethereum faced several challenges in August, and its Layer 2 networks were 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 from the previous month. DeGate saw a notable 20.6% increase in TVL, Scroll grew by 7.4%, and Taiko rose by 7.1%. However, Blast experienced an 18.8% decline, while zkSync dropped by 8.8%.
Source: Ethereum Layer 2 Overview- Rollups (Canonically Bridged)
Overall, user activity across Ethereum Layer 2s remained subdued, signaling a need for renewed innovation and more compelling applications to re-engage users. With Bitcoin Layer 2s thriving this year, Ethereum’s Layer 2 ecosystem may require fresh narratives and spaner user engagement to regain momentum.
One of the most talked-about developments in the Ethereum ecosystem was the introduction of Soneium. On August 23, Sony Blockchain Solutions Labs—a joint venture between Sony Group and Singapore-based Startale Labs—announced the creation of a new Layer 2 network called Soneium, built on Ethereum and powered by Optimism’s OP Stack technology. Soneium aims to bridge the gap between Web3 innovation and consumer applications in gaming, entertainment, and finance.
Soneium
Following the announcement, several key initiatives were launched, including the “Minato” testnet, the developer-focused program “Soneium Spark,” and a partnership with Transak for global fiat on-ramp services. With major industry players like Sony entering the blockchain space, there is growing optimism that such developments could bring more mainstream users into the Web3 ecosystem.
Web3 Gaming
In August, 1,492 games were active across various blockchain networks, a 5.45% decline from July. BNB Chain, Polygon, and Ethereum led the market with shares of 20.2%, 17.4%, and 17.0%, respectively.
Ronin, opBNB, Nebula (a SKALE subnet), and NEAR dominated in terms of daily active users (DAUs), averaging 1.34 million, 691.3K, 348.6K, and 321.0K DAUs respectively. By the end of August, these chains held DAU market shares of 28.0%, 23.8%, 8.8%, and 6.6%.
Source: Daily Active Users by Chain
Ronin’s DAU market share declined steadily throughout the month, dropping from 38.1% on August 1 to 28.0% by August 31. Despite this, Ronin’s average DAU in August was nearly double that of opBNB, the next largest chain. This downward trend was largely driven by the performance of the game Lumiterra, which saw its DAUs fall from 600K in the first week to 150K in the last week of August.
Additionally, on August 6, the Ronin Bridge was temporarily paused due to a whitehat hack that exposed a critical misconfiguration in a proposal to upgrade the bridge with new features. Approximately $12 million worth of cryptocurrencies were drained. Although the issue was swiftly resolved and all funds were recovered, the incident had a noticeable impact on activity within the Ronin ecosystem.
Conversely, opBNB’s DAU share rose from 17.5% to 23.8% over the month. By August 31, its market share had almost doubled compared to July 1, when it stood at 13.1%. SERAPH: In The Darkness, which launched on opBNB in mid-July, gained significant traction, with its DAUs growing from 187.1K on August 1 to 515.0K by the end of the month.
Nebula’s market share also grew, rising from 7.6% to 8.8%. As a SKALE network chain with a “zero gas fee” model, Nebula’s growth was driven by games like Yomi Block Puzzle, moteDEX, and Haven’s Compass.
For more data insights, see the August 2024 Report: Web3 Gaming Sees User Growth Amid Crypto Market Drop.
Investment & Funding
August saw 12 funding events in the public chain sector, totaling $117.9 million, a 20.1% increase compared to July. Notably, four of these events did not disclose their funding amounts.
Public Chain Funding Events in August 2024 (Source: crypto-fundraising.info）
The rise in total funding this month was primarily driven by a single major event. While July’s largest funding round was Caldera’s $15 million Series A, August saw Story Protocol’s impressive $80 million Series B, significantly boosting the overall figures.
PIP Labs, the core contributor behind Story Protocol, led this raise with support from the venture capital giant Andreessen Horowitz (a16z). Story Protocol aims to revolutionize intellectual property management (IP) by transforming it into modular, programmable “IP Legos.” These assets can be licensed, managed, and monetized through smart contracts on a blockchain. Story Protocol empowers creators to embed licensing and royalty terms directly into their intellectual property, giving them greater control over their data. The project’s mainnet is set to launch later this year, generating considerable anticipation.
Story Protocol
In addition to Story Protocol, three Layer 1 blockchains, including Quai Network, U2U Network, and Particle Network, secured new funding rounds in August. On the Layer 2 front, multiple projects raised capital, including Bitcoin Layer 2s Ark and Nexio, Ethereum Layer 2s Essential, Corn, and Reddio, Solana Layer 2 Soon, and other Layer 2s like Rivalz Network and Lync.
An emerging trend worth highlighting is the growing interest in Move Stack. Two Layer 2 blockchains, Nexio and Lync, which Move Stack powers, gained significant attention from venture capitalists this month, further solidifying Move’s expanding influence in the blockchain ecosystem.
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About Footprint Analytics
Footprint Analytics is a comprehensive blockchain data analytics platform that simplifies complex analysis for businesses and projects in the Web3 ecosystem. It offers tailored solutions that eliminate the need for extensive expertise and infrastructure maintenance. The platform provides long-term growth tools designed to help build and manage communities step by step, emphasizing sustainable growth and user loyalty. By combining powerful analytics with community management tools, Footprint Analytics enables projects to leverage blockchain data effectively for decision-making and growth strategies across various sectors including GameFi, NFT, and DeFi.
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