September 2024 Chains Report
Author: Stella L (stella@footprint.network)
Data Source: Footprint Analytics Chains Research Page
September 2024 witnessed substantial growth in the blockchain sector, with crypto markets posting gains amid favorable macroeconomic conditions and regulatory progress. Bitcoin Layer 2 solutions emerged as standout performers, outpacing Ethereum Layer 2s in growth rate. The Layer 1 landscape evolved, highlighted by Sui's entry into the top 15 chains by market cap. Ethereum's ecosystem faced scrutiny, prompting discussions on future development standards, while Bitcoin Layer 2s saw significant TVL increases.
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
September 2024 witnessed a robust performance in the cryptocurrency markets. Bitcoin demonstrated significant strength, surging from $57,429 to $63,485, marking a 10.5% increase. Ethereum, while positive, continued to lag behind Bitcoin. Ether rose from $2,426 to $2,603, a 7.3% gain. The ETH/BTC price ratio hit a new cycle low of 0.0386 mid-month.
Source: BTC Price & ETH Price
The positive market sentiment was driven by a confluence of factors. A shift in monetary policy played a crucial role, with the U.S. Federal Open Market Committee (FOMC) implementing a larger-than-anticipated 50 basis point rate cut on September 18. This move was complemented by Chinese policymakers introducing macro stimulus measures, bolstering global equities.
Regulatory advancements also contributed to the upbeat mood. The U.S. Securities and Exchange Commission (SEC) greenlit an application for listing options on spot Bitcoin Exchange-Traded Products (ETPs), signaling a more accommodating stance towards crypto-based financial instruments. This regulatory progress coincided with increased institutional interest, exemplified by Bank of New York's apparent readiness to offer cryptocurrency custody services.
The political landscape further buttressed market optimism. Former U.S. President Trump's announcement of a new DeFi protocol and Vice President Harris's supportive comments on digital assets and blockchain technology underscored growing political acceptance of the crypto sector. These developments collectively fostered a conducive environment for cryptocurrency market growth in September.
Layer 1
September 2024 saw the total market cap of blockchain cryptocurrencies rise to $1.9 trillion, a 6.9% increase from August. Market dominance remained with Bitcoin (67.3%), Ethereum (16.8%), BNB Chain (4.5%), and Solana (3.9%). While Bitcoin and BNB Chain maintained their market shares, Ethereum's decreased by 0.6%, and Solana's increased by 0.3%.
Source: Chain Token Market Cap Share
Among the top 15 chains by market cap, Sui demonstrated remarkable growth, with a 132.2% increase in market cap, entering the list for the first time at 13th place.
Source: Chain Token Market Cap and Price
The total TVL in the DeFi sector reached $68.1 billion, a 6.4% increase from August, with Sui's TVL surging by 67.4%.
Source: Chain TVL Ranking
September marked a breakthrough month for Sui, driven by the Sui Foundation's initiatives to incentivize dApp development. dApps such as NAVI Protocol in DeFi and the Telegram game BIRDS significantly boosted on-chain activities.
At the TOKEN2049 Singapore conference, Vitalik Buterin highlighted crypto's evolution from infancy to usability, emphasizing the industry's progress towards mass adoption. Several trends emerged in this direction:
Web3 gaming continued to be a key driver for blockchain adoption. Multiple networks, including TON, BNB Chain, Sui, and Aptos, leveraged the Telegram ecosystem to expand their user base.
Stablecoins and their financial applications gained traction. Celo's success in Africa demonstrated the potential of stablecoins in emerging markets, while Sui announced the upcoming integration of Circle's native USDC.
Efforts to reduce entry barriers intensified. BNB Chain launched a "Gas-Free Carnival Season," offering zero gas fees on certain transactions. Solana unveiled its Web3 smartphone, Solana Seeker, and Ronin introduced Ronin Waypoint, a universal account and keyless wallet for its ecosystem.
These developments underscore the industry's focus on enhancing user accessibility and expanding blockchain's reach across various sectors and demographics.
Bitcoin Layer 2
September 2024 marked significant growth for Bitcoin Layer 2s and sidechains, with total TVL reaching $1.5 billion, a 33% increase from August. Core emerged as the sector leader with $442.7 million TVL (30.5% market share), followed by Bitlayer ($389.9 million, 26.8%), Rootstock ($178.7 million, 12.3%), and Merlin Chain ($132.8 million, 9.2%).
Source: Bitcoin Scaling Solutions TVL
Core's performance was particularly notable, more than doubling its TVL from August. This surge was primarily driven by the Core Ignition Drop Season 2, which expanded its focus to include Web3 games alongside BTCFi, significantly boosting on-chain activities. As a result, Core overtook Bitlayer as the largest Bitcoin scaling solution by TVL, although Bitlayer still posted a respectable 9.4% TVL increase.
Rootstock maintained steady growth, increasing its TVL by 12.5% and retaining its third-place ranking. Other notable performers included BSquared (42.8% TVL increase), Stacks (26.5% increase), and BEVM (6.3% increase).
Looking ahead, the Bitcoin staking protocol Babylon announced its Mainnet Phase-1, Cap-2, set to launch in the second week of October. The swift staking of 1,000 BTC during Cap-1 has generated high anticipation for this next phase.
Solv Protocol expanded its Bitcoin staking ecosystem, introducing new options for cbBTC holders on Base and launching the high-yield SolvBTC.BBN (Corn) pool in partnership with Pendle. The platform integrated with multiple DeFi protocols, bringing its total integrations to 35 blockchains and protocols. Leveraging Chainlink's technology for cross-chain functionality and expanding to Avalanche and Base, Solv now operates across nine blockchains. These developments, including becoming the first BTC staking protocol within the Base ecosystem, highlight Solv's growing role in broadening Bitcoin-based DeFi opportunities across multiple chains.
Ethereum Layer 2
September 2024 saw the canonically bridged TVL across Ethereum Layer 2s reach $23.2 billion, an 8.31% increase from August, though this growth was less pronounced than that of Bitcoin Layer 2s.Arbitrum One, Optimism, and Base maintained their dominance in TVL market share at 48.8%, 19.7%, and 8.1% respectively, with minimal changes from the previous month. However, their combined market share decreased slightly, indicating growth among other Layer 2 solutions.
DeGate continued its span performance, with a 17.9% TVL increase in September, following a 20.6% rise in August. Taiko and Scroll also saw growth, with their TVL increasing by 7.0% and 7.4% respectively. Conversely, Blast experienced an 18.9% TVL decrease, compounding its 18.8% decline in August.
Source: Ethereum Layer 2 Overview- Rollups (Canonically Bridged)
The Ethereum ecosystem faced community scrutiny regarding innovation and development. In response, Vitalik Buterin was notably active on social media, addressing concerns and outlining future directions.
A significant development came when Vitalik Buterin announced on X (formerly Twitter) his intention to "only publicly mention (in blogs, talks, etc) L2s that are Stage 1+" starting in 2025. This statement underscores a push for stricter standards among Ethereum Rollups, emphasizing the need for Layer 2 solutions to achieve "Stage 1" by next year. To meet this benchmark, Rollups must demonstrate decentralization and security, including operational fraud proof or validity proof schemes.
Currently, only two Rollups have achieved "Stage 2": DeGate and Fuel. Three others have reached "Stage 1": Arbitrum One, Optimism, and dYdX V3. This classification highlights the ongoing evolution and maturation of the Ethereum Layer 2 ecosystem, with a clear emphasis on security and decentralization as key priorities for future development and recognition.
Web3 Gaming
In September, the number of active games across blockchain networks rose to 1,563, marking a 4.5% increase from August. The market leaders remained consistent, with BNB Chain, Polygon, and Ethereum holding shares of 22.0%, 18.6%, and 14.8%, respectively.
Source: Active Games Shared by Chain
The DAU landscape saw dramatic changes, with opBNB, Ronin, and Nebula (a SKALE subnet) emerging as the top performers, averaging 1.1 million, 1.1 million, and 457.9K DAUs respectively. By the end of September, these chains commanded DAU market shares of 28.2%, 20.1%, and 9.2%, respectively.
Source: Daily Active Users by Chain
opBNB demonstrated remarkable growth, with its average DAU in September surging by 62.0% from August. Its market share expanded from 22.4% to 28.2% throughout the month. This growth was driven not only by the popular game SERAPH: In The Darkness but also by new entrants like Elfin Metaverse, an eSports gaming platform and open-world metaverse launched in mid-September.
Conversely, Ronin experienced a continued decline in its DAU market share, dropping from 29.5% to 20.1% over the month. This downward trend was primarily attributed to the performance of Pixels, which saw its DAU fall from over 700K to 470K. Notably, while Ronin's average DAU in August was nearly double that of opBNB, September saw opBNB overtake Ronin, marking a significant shift in the competitive landscape.
Sui's average DAU increased by 48.4% to 92.4K, driven by the Telegram game BIRDS, which accumulated 621.5K users within its first week of launch. This success underscores the growing trend of blockchains leveraging Telegram for user acquisition.
For more data insights, see the September 2024 Web3 Game Report: Between Hype and Sustainability.
Investment & Funding
September witnessed a significant uptick in public chain sector funding, with 11 events totaling $173.7 million, a 47.3% increase from August. Three of these events did not disclose funding amounts.
Chain Funding Events in September 2024 (Source: crypto-fundraising.info）
Two major events drove this month's funding surge.
The Celestia Foundation, behind the Celestia blockchain network, secured $100 million in a round led by Bain Capital Crypto, bringing its total funds to $155 million. Launched in 2023, Celestia's innovative architecture separates consensus and data availability from execution, offering developers enhanced flexibility for layer-2 rollups compared to traditional monolithic chains. However, Celestia faced community scrutiny over this funding announcement. Questions arose regarding potential "pumping and dumping," and there were claims that the disclosed $100 million financing was actually an OTC token sale conducted several months prior. This led to temporary suspensions and debates within the community about the nature and timing of the disclosed funding.
In another significant move, Bitget and Foresight Ventures made a strategic $30 million investment in The Open Network (TON) blockchain. This investment aims to bolster Telegram-based projects, with a focus on tap-to-earn games like Hamster Kombat and Notcoin.
The month also saw funding rounds for three Layer 1 blockchains: Initia, Octra, and Aptos. Layer 2 solutions continued to attract investor interest, with Bitcoin Layer 2 Zulu Network, Ethereum Layer 2s RISE Chain, Kroma, and t1 protocol, as well as Hemi Network and AminoChain, all securing capital.
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