Layer-1 Blockchains Are 10x Larger than Layer-2s

What are the Top Layer-1 Blockchains?

Ethereum (ETH) is the top Layer-1 (L1) blockchain, with $23.0 billion in total value locked (TVL) as of October 2023. It reached its yearly peak TVL of $31.5 billion in April 2023, shortly after the Ethereum Merge (Shapella/Shanghai Upgrade) on April 12, 2023.

The top 10 L1 blockchains have 9.6 times more TVL than the top 10 L2 blockchains. Despite the fact that L1s have seen smaller growth in terms of TVL compared to L2s, the total value locked (TVL) in the top L1s significantly surpasses the TVL of the top L2s. This underscores that TVL remains predominantly concentrated on L1s and suggests that L2s still have substantial ground to cover in this respect.

Tron (TRX) is the second largest L1 blockchain, reaching its yearly peak of $7.9 billion in TVL in October 2023.

Binance Smart Chain (BSC) follows closely as the third largest L1 blockchain, with $2.8 billion in TVL in October 2023. It reached its yearly peak TVL of $5.7 billion in February 2023.

6 out of 10 of the top 10 L1 blockchains now run on the Proof-of-Stake (PoS) consensus mechanism, while Bitcoin (BTC) is the only blockchain in the top 10 L1 blockchains which runs on the Proof of Work (PoW) consensus mechanism. The other three blockchains in the top 10 each run on slightly differing consensus mechanism, with Tron running on a Delegated Proof of Stake (DPoS), BSC running on a Proof of Staked Authority (PoSA) and Cronos running on a Proof of Authority (PoA) consensus mechanism.

Despite Bitcoin being the first blockchain, it ranks at number 8 in the top 10 L1 blockchains in terms of TVL. This is due to the nature of Bitcoin, where its main purpose is to be a store of value and digital gold rather than for DeFi.

ETH, TRX and BSC combined make up 92.5% of the total TVL of the top Layer-1 blockchains.

Top 10 Layer-1 Blockchains Market Share

Total TVL in the top 10 Layer-1 blockchains reached a yearly peak of $45.3 billion in April 2023, but has since decreased to $36.5 billion in October 2023. This represents a 4.5% increase from January 1, 2023, when TVL totaled $33.5 billion.

Ethereum Dominates the L1 Space

Ethereum dominates the Layer-1 blockchain space, capturing 63.1% or $28.0 billion TVL of the top 10 L1 blockchains market share in October 2023.

Despite reaching its yearly peak TVL of $31.5 billion in April 2023, its market share peaked in March 2023, capturing 69.6% or $27.8 billion TVL. The gains were largely led by the DeFi sector, with MakerDAO (MKR), Curve (CRV), and Aave v2 (AAVE) leading the charge, accounting for 54.9% or $17.2 billion of TVL on Ethereum in April 2023.

Despite being the dominant L1, Ethereum has lost market share since the start of Q3, with market share dropping from 69.3% or $26.9 billion TVL in July 2023 to 63.1% or $23.0 billion TVL in October 2023. Curve still remains the top 5 protocol on Ethereum, despite suffering the largest loss in TVL after its re-entrancy attack on July 30, 2023, where TVL decreased by 30.6% or $1.9 billion since January 1, 2023.

Tron Comes In Second

Tron has climbed to become the second largest L1 in 2023, growing from 12.3% or $4.1 billion in TVL in January 2023 to 21.6% or $7.9 billion in October 2023. This represents a 91.6% increase since the start of the year.

JustLend and JustStables, the two most prominent protocols on Tron, are the biggest contributors to the increase of TVL, with an increase of 120.6% and 80.2%, respectively, since January 1, 2023. Both these protocols make up the majority of TVL on Tron, accounting for 93.9% of the TVL on Tron, with three addresses dominating the TVL on JustLend.

Solana On The Rise

Solana (SOL) is the fastest growing L1 among the top 10 L1 blockchains in 2023, with its TVL increasing by 97.2%% or $204.5 million since the start of the year.

Its TVL has been steadily increasing throughout the year, reaching a yearly peak of 1.1% of market share or $415.0 million in TVL in October 2023. Solend is the biggest contributor towards the gain, increasing by 398.0% or $65.5 million since January 1, 2023. Marginfi, which launched in January 2023, comes in close as the second biggest protocol on Solana, capturing $57.2 million in TVL in October 2023.

Newcomers Fail to Breach Into The Top 10

L1 newcomers Aptos (Oct 2022), SUI (May 2023), Pulsechain (May 2023), Tenet (May 2023), SEI (Aug 2023), and Celestia (Nov 2023) fall behind in terms of TVL compared to the top L1 blockchains. This suggests that liquidity remains predominantly concentrated within the established top L1 blockchains.

Aptos, SUI, Pulsechain, Tenet, and SEI have a combined TVL of $346.8 million, putting them behind Solana at the seventh spot in the top 10 L1 blockchains. Pulsechain makes up the majority of TVL among the newcomers, accounting for 53.9% or $186.8 million of TVL among the newcomers.

Top 10 Layer-1 Blockchains

The top 10 Layer-1 Blockchains by TVL as of October 31, 2023 are:

Methodology

The study examined the top Layer-1 (L1) Blockchains by their total value locked (TVL) from January 2023 to October 2023. This TVL excludes liquid staking and all double-counted TVL of a chain. Data was obtained from DefiLlama. The top 10 Layer-1 blockchains are Ethereum, Tron, BSC, Polygon, Avalanche, Solana, Cronos, Bitcoin, Cardano, and Kava. The Layer-1 blockchains launched from October 2022 - October 2023 are Aptos, SUI, Pulsechain, Tenet, SEI, and Celestia. The top 10 Layer-2 blockchains are Arbitrum, Optimism, Base, zkSync Era, Rootstock, Loopring, Mantle, Starknet, Linea, and Metis.

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Curious to find out more about our previous research studies & statistics? Check out this one we did on the top Layer-2 Solutions, by total value locked.

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Nicholas Boey

Nicholas is a Market Research Intern at CoinGecko. He can be seen crawling around the vast crypto space, be it NFTs, crypto or memecoins from time to time. People in web3 call him picnicmou. Follow the author on Twitter @picnicmou