Ethereum’s dominance in the layer-1 blockchain arena is dwindling according to Nansen’s CEO Alex Svanevik, highlighting a competitive environment for Web3 platforms. Solana emerges as a strong contender, outpacing Ethereum on key metrics, but smaller chains face challenges in achieving lasting traction. The market’s shifting dynamics suggest an exciting but uncertain future for blockchain technology.
Ethereum appears to be losing its stranglehold on the layer-1 blockchain world, as its dominance wanes significantly. At a recent LONGITUDE by Cointelegraph event, Alex Svanevik, CEO of Nansen, discussed this shift, asserting that the current competition for the title of leading Web3 platform is wide open. “If you’d asked me three or four years ago whether Ethereum would dominate crypto, I’d have confidently said yes, but not anymore,” he noted.
Despite this decline, Ethereum remains the largest player among layer-1 networks. Recent data from DefiLlama highlights that Ethereum boasts a total value locked (TVL) of around $52 billion, representing about 51% of all cryptocurrency in the blockchain space. However, it’s a stark contrast from 2021, when Ethereum held approximately 96% of the total TVL, indicating a significant shift in the landscape.
Svanevik described the current atmosphere as an exciting battleground where multiple L1 blockchains vie to be the preferred platform for trading and other blockchain applications. He stated, “We’re witnessing rapid growth among smaller chains, with several emerging as frontrunners in this evolving space.” The potential for innovation and competition is palpable, he suggested.
Solana is reportedly leading this charge, positioning itself as a formidable competitor by surpassing Ethereum in critical on-chain metrics. “Solana has outshone Ethereum in areas such as active addresses, transaction volume, and even gas fees,” Svanevik explained. Although Ethereum continues to top the TVL rankings and maintains a robust presence in stablecoin issuance, Solana’s impressive growth trajectory is hard to disregard.
While the interest in several smaller layer-1 blockchains is peaking, not all are successfully achieving long-term traction, according to Vardan Khachatryan, chief legal officer of the trading platform Fastex. He expressed concern that many chains gain popularity primarily during hype cycles driven by phenomena like new coin releases or airdrops rather than through sustained user adoption. “In reality, trends can be fleeting,” Khachatryan lamented.
As the industry races toward finding the next robust and reliable Web3 platform, the dynamics at play suggest that the field is now more competitive than ever. Technological advancements such as Zero-Knowledge proofs are even beginning to enhance Bitcoin’s smart contract capabilities, hinting at a rapidly evolving future for blockchain technology.
