2024 Annual Report on Public Chain Industry: From Infrastructure Competition to Application Breakthroughs

2024 represents an important watershed in the public chain industry, with the focus shifting from technical competition to practical application. (Synopsis: A quick look at the winners and losers of each L1 public chain this year, and the champion rises more than 7000%) (Background supplement: The old public chain XRP has been reborn, how far can it go in the future? 2024 marks an important watershed in the public chain industry, and the focus of the industry shifts from technology competition to practical application landing. During the year, the public blockchain Market Caprise 105.3% reached $2.8 trillion, the BTC price exceeded $100,000, and institutional-grade adoption through ETFs, the Ethereum Layer 2 network extension kit reached more than 200 chains, and the BTC Layer 2 TVL rose 1,277.6%, all demonstrating the industry's shift from technical experimentation to practical real-world applications. The public chain industry is experiencing a gradual shift from technology-driven development to application-demand-driven development. Note: Unless otherwise stated, all information in this report is as of December 20, 2024. Market Dynamics: RISE and Transformation In 2024, the public chain industry will achieve an unprecedented rise, and a number of key indicators have shown significant expansion. The total market caprise of the public chain reached $2.8 trillion at 105.3%. BTC dominance rose to 69.8%, while Ethereum's share fell from 20.4% to 15.2%. The shares of BNB Chain and Solana are stable at 3.5% and 3.3%, while other platforms account for 8.1%. The Decentralized Finance zone also showed strong rise momentum in 2024, with total lock-up volume (TVL) reaching $102.8 billion at the end of the year, up 88.6% year-over-year. Among the top 10 public blockchains in TVL, BTC and TON saw the most significant increases, both exceeding 2,000%. Aptos, Sui and Solana also performed well, rising 754.4%, 677.1% and 321.3%, respectively. But both Tron and Avalanche's TVL declined. The Ethereum Layer 2 ecosystem experienced significant centralization in 2024. Arbitrum maintained its lead with a TVL of $10.6 billion and a market share of 41.1%, down from 50.8% in 2023. Base became the dark horse of the year, jumping to second place with $5.8 billion TVL (22.5% share), while Optimism ranked third with $4 billion TVL (15.8%). Together, these three platforms account for 79.1% of Ethereum L2 Decentralized Finance TVL, while previous competitors such as Blast, zkSync and Starknet have all lost market share. At the same time, the ecosystem continues to expand, with 50 Rollups and 70 Validium & Optimium running on Mainnet, plus about 90 upcoming chains, bringing the total number of Ethereum L2s to over 200. The BTC Layer 2 and Sidechain ecosystems experienced explosive rises, with total lock-ups reaching $2.6 billion, a significant rise of 1,277.6% from 2023. Core leads with $790 million TVL (30.3% market share), followed by Bitlayer ($500 million, 19.4% share) and BSquared ($330 million, 12.7% share). This rise is not only reflected in TVL, the number of active chains has more than doubled throughout the year, and there are now nearly 20 chains. Competitive Landscape: Leaders vs. Challengers In 2024, the competitive landscape of the public blockchain ecosystem will change significantly, mainly due to the increased dominance of BTC, the recovery of Solana, and the rise of emerging challengers. BTC: From store of value to financial infrastructure BTC achieved a superior rise in 2024, with a price rise of 129.2% and a Market Caprise of 131.7%. This rise was driven by a combination of institutional adoption by the Spot ETF, the April Halving incident, and positive sentiment after the U.S. election. In addition to breaking the $100,000 price milestone, there are two key developments in the BTC ecosystem: Institutional adoption boosts: The success of the Spot ETF in January revolutionized the institutional access landscape, with BlackRock rapidly reaching $20 billion in product size. BTC surpassed silver and Saudi Aramco to become the seventh largest asset in the world, marking a shift from a speculative asset to a recognized store of value. BTCfi Rises: The BTC ecosystem enables an extended suite that goes beyond price rise through innovative financial products. Babylon's BTCstake project, Solv Protocol's Cross-Chain Interaction solution, and Core's Fusion upgrade all demonstrate an increasingly mature ecosystem. Cross-Chain Interaction features have progressed through the integration of the BOB network with Optimism and BEVM's "Super BTC" framework, among others, although standardization remains challenging. Ethereum: Layer 2 Drives Ecological Evolution 2024 is a pivotal year for Ethereum to transform into a central ecosystem for Layer 2. Despite rising 55.8% to $3,744 in price, Ethereum faces complex challenges in repositioning roles and maintaining correlation in the context of Layer 2 adoption rise. The success of the Spot ETF in July received some institutional recognition, but Ethereum's price performance significantly lagged BTC. EthereumMainnet has achieved important changes through the "Cancun Upgrade", successfully reducing Layer 2 transaction costs and improving scalability suites. However, the migration of activities to Layer 2 led to a decline in Ethereum's own fee income, sparking discussions about Ethereum's long-term sustainability. The Ethereum Foundation responded with several initiatives, including implementing Proto-Danksharding (EIP-4844), developing cross-L2 communication standards, and strengthening security requirements for Layer 2 solutions. The Layer 2 ecosystem showed significant rise and integration throughout the year. Notable new entrants enrich the ecosystem, including World Chain, Uniswap's Unichain, and Sony's Soneium. This evolution highlights Ethereum's shift from a pure execution layer to a settlement and security provider that diversifies the Layer 2 ecosystem. While revenue models and competitive dynamics remain in question, Ethereum's continued growth in developer activity and expansion suite solution innovation demonstrates its ability to adapt. Solana: The third giant saw a strong return of Solana in 2024, with a rise of 70.8% in price, 90.9% in Market Caprise, and a record high of $260 in November. This renaissance began with Jupiter Airdrop in January, and the Solana ecosystem is more active than ever. Solana established itself as a hub for retail investor, nurturing a vibrant meme and decentralized finance community. In addition to mem...