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February 2025 Chains Report: Correction Shakes, Innovation Stands

Author: Stella L (stella@footprint.network)  
Data Source: Footprint Analytics Chains Research Page





February 2025 brought a sharp market correction across the blockchain space, challenging both veteran networks and newcomers alike. Bitcoin held firm with growing dominance, yet most chains — Solana, Avalanche, and Ethereum included — saw steep declines. Even so, development didn’t slow: Berachain’s mainnet debut, Base’s infrastructure upgrades, and Uniswap’s Layer 2 rollout stood out as highlights. This pullback exposed a divide between platforms with solid foundations and those faltering after early hype.

Market Overview

February delivered a stark correction: Bitcoin dropped 14.8% from $98,768 to $84,177, while Ethereum fell harder, down 27.7% from $3,065 to $2,216. The final week saw intensified selling as security fears rattled nerves.


Source: Footprint Analytics - BTC Price & ETH Price

This followed January’s bullish run but hit a wall with mixed signals. Investors grappled with optimism from regulatory clarity and jitters from a massive security breach. Market sentiment soured as risk appetite waned, especially in speculative corners like memecoins. Globally, North America showed cautious optimism due to policy shifts, while Asia-Pacific markets felt the hack’s ripple effects more acutely.

Regulatory and Policy Updates

The Trump administration’s crypto executive order, spotlighting self-custody and stablecoin growth, offered a rare dose of clarity. Yet, the mood shifted after the February 21 ByBit hack—$1.5 billion lost, the biggest in crypto history—sparked fresh security concerns. Meanwhile, the SEC softened its stance, halting probes into players like  Coinbase, Binance, and Uniswap and dropping its “dealer rule” appeal. The bipartisan GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act further bolstered stablecoin frameworks, signaling a friendlier U.S. regulatory horizon.

Investor behavior mirrored this turbulence. The memecoin frenzy, spiked by a token tied to Argentina’s Javier Milei and soured by promotional scandals, saw valuations tank and trading thin out. This shift hinted at a broader retreat from high-risk assets.

Layer 1

Layer 1 chains took a hit, with total market cap sliding 20.8% to $2.3 trillion. Bitcoin’s dominance rose from 71.3% to 74.2%, while Ethereum’s share shrank from 14.0% to 11.9%. BNB Chain edged up to 3.7%, but Solana slipped from 4.0% to 3.3% after a 36.3% price drop. 

Litecoin bucked the trend, up 1.0% to $128.7, while Solana (-36.3%), Avalanche (-35.7%), and others lagged. 

Source: Footprint Analytics - Chain Token Market Cap and Price

DeFi TVL fell 18.9% to $84.0 billion, with Ethereum at $44.9 billion (down 21.7%) and Solana at $8.6 billion (down 34.1%).

Berachain burst onto the scene, hitting sixth place with $4.5 billion TVL post its February 6 mainnet launch. Distributing 80 million BERA tokens, this “EVM-identical” chain uses a proof-of-liquidity model — think staking with a twist, turning liquidity into network security. After a $100 million raise in 2024, its airdrop and governance perks fueled buzz. Unlike traditional proof-of-stake, this approach could redefine how chains balance growth and stability, making Berachain a name to watch.


Solana’s memecoin wave cooled off. High-profile flops, like Milei’s token, dented confidence, slashing DEX volumes on platforms like Raydium. While memecoins won’t vanish — think digital trading cards — their peak frenzy may be fading, with traders eyeing fundamentals over hype.

Bitcoin Layer 2 & Sidechain

Bitcoin’s L2 and sidechain TVL shrank 24.5% to $2.1 billion from $2.7 billion. Core led with $455.9 million (down 42.0%), followed by Bitlayer ($354.7 million) and BSquared ($319.8 million). BOB shone with just a 7.9% dip to $218.5 million.

Source:  Footprint Analytics - Bitcoin Layer 2s & Sidechains TVL

Among mid-tier platforms, Merlin stood out with a modest 9.3% decline to $149.9 million TVL. Smaller players struggled more, with SatoshiVM hit hardest at a 31.5% drop, trailed by MAP Protocol (-29.6%) and Interlay (-27.4%).

Source:  Footprint Analytics - Bitcoin Layer 2s & Sidechains TVL

The sector’s slump aligns with Stacks co-founder Muneeb Ali’s take at Consensus 2025: “More than two-thirds of the existing Bitcoin layer-2 projects will cease to exist within three years as their initial excitement fades.” He flagged a tough market ahead, and February’s quiet updates suggest consolidation’s begun. Looking forward, platforms proving real utility may outlast those riding momentum alone.

Ethereum Layer 2

Ethereum L2 TVL dropped 23.4% to $14.0 billion. Arbitrum held the lead at $4.5 billion (down 33.4%), but Base climbed to second with $4.2 billion (down 10.6%), nudging Optimism ($2.1 billion) to third. Polygon zkEVM soared 104.1% to $301.0 million, a rare bright spot.

Source:  Footprint Analytics - Ethereum Layer 2 Overview

Base rolled out Flashblocks (faster confirmations), Appchains (custom L3s), and Smart Wallet Sub Accounts — moves to keep users hooked. Unichain’s mainnet launch on February 16, after a testnet handling 95 million transactions, positions it as a scalability game-changer, with heavyweights like Circle onboard. Starknet’s Nums app-chain, a layer-3 gaming twist, showcases modular design’s future.


Meanwhile, Sonic EVM, though not an Ethereum L2, caught attention with its February 27 Mobius mainnet launch as Solana’s first SVM chain extension, boasting 10,000 TPS and drawing $47.6 million to Aave in just days. These steps signal L2s doubling down on tech over market noise.

Vitalik Buterin weighed in on February 19, stressing Ethereum needs a sharper identity amid rising competition. He’s pushed L2s to lead on scalability — think 17x transaction boosts — and interoperability, noting their shift from “glorified multisigs” to robust networks. On Sonic EVM, he hasn’t commented directly, but its EVM compatibility and speed echo his vision for a seamless “Ethereum-verse.” Still, he’s hinted at frustration with the ecosystem’s casino-like tendencies, urging a focus on real value over speculative fluff.

Investment & Funding

Funding slowed with six deals totaling $32.4 million. Mango Network nabbed $13.5 million for its EVM-MoveVM hybrid, eyeing a Q1 2025 launch. Fluent Labs scored $8 million for a multi-VM L2 bridging Ethereum and Solana.

Chains Funding Events in February 2025 (Source: crypto-fundraising.info





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.



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