**Author:** Stella L ([email protected])
**Data Source:** Footprint Analytics Public Chain Research Page
In August, the cryptocurrency market experienced significant volatility, with both Bitcoin and Ethereum facing noticeable declines. Layer 1 blockchains generally suffered from market downturns; however, Tron exhibited strong growth against this trend. The Bitcoin Layer 2 sector demonstrated remarkable momentum, with the total value locked (TVL) of various scaling solutions seeing substantial increases. Meanwhile, the Ethereum Layer 2 network faced considerable pressures but continued to evolve, with heavyweight players such as Sony joining the ecosystem, becoming a highlight. Despite a reduction in market capitalization, innovation within Bitcoin and Ethereum Layer 2 remains pivotal for future growth.
This report’s data is sourced from Footprint Analytics’ Public Chain Research Page, which offers an easy-to-use dashboard containing the most critical statistics and metrics in the public chain space, updated in real-time.
**Market Overview**
In August, both Bitcoin and Ethereum saw significant declines. The Bank of Japan unexpectedly announced an interest rate hike at the end of July, triggering a chain reaction across various markets. Strategies such as short-term volatility and forex arbitrage experienced significant drops in returns, leading to a sharp decline in cryptocurrency values during the first week of August. Both Bitcoin and Ethereum hit their lowest points of the month on August 7.
**Data Source:** Bitcoin and Ethereum Price Trends
The ongoing selling pressure persisted throughout the month, exacerbated by actions from various governments and the lingering issues from Mt. Gox, although the impact of these factors gradually diminished.
At the same time, Ethereum is undergoing significant transformations, which have caused uncertainty among some investors. The blockchain plans to scale by shifting more transactions to Layer 2 networks. This year, the activity on Ethereum Layer 2 networks has surged, with giants like Sony launching projects such as Soneium within this ecosystem. However, the shift of activity to Layer 2 has led to a reduction in Ethereum’s transaction fee revenue, which could affect the value of Ether.
By the end of the month, following the arrest of Telegram founder Pavel Durov in France, market focus increasingly shifted toward the relationship between blockchain technology and digital privacy. Although Federal Reserve Chairman Jerome Powell hinted at the possibility of interest rate cuts later in the month, overall market sentiment remained predominantly negative.
**Layer 1**
As of the end of August, the total market capitalization of cryptocurrency blockchains decreased by 12.1% compared to the end of July, settling at $1.74 trillion. The market continues to be led by Bitcoin, Ethereum, BNB, and Solana, with market shares of 67.2%, 17.4%, 4.5%, and 3.6%, respectively. Notably, Bitcoin’s market share grew by 2.4% in absolute terms, while Ethereum’s market share declined by 2.3%.
**Data Source:** August 2024 Public Chain Token Market Capitalization Share
Bitcoin closed at $59,017, reflecting an 8.7% decline. Ethereum’s downward trend was more pronounced, closing at $2,516 with a drop of 21.4%. Among the top 15 chains by market capitalization, Tron was the only one to achieve both price and market cap growth this month, with TRON’s price rising by 23.1% and market cap increasing by 22.7%. In contrast, other chains exhibited downward trends.
**Data Source:** August 2024 Public Chain Token Prices and Market Capitalization
Tron stood out amidst market fluctuations by capitalizing on the Meme craze, leading to a surge in on-chain activity. The launch of SunPump, the first Meme fair launch platform on Tron, significantly increased user engagement.
The BNB chain also introduced new policies and incentives to promote on-chain Meme-related activities, with Simon’s Cat, TOkenFi, and FLOKI leading in trading volume over the past 30 days.
**Data Source:** BNB Chain Popular Memecoins
Additionally, several major financial institutions expanded their blockchain portfolios this month. Leading asset management firm Franklin Templeton increased its blockchain fund to include Avalanche. Meanwhile, Grayscale Investments launched the Avalanche Trust and a new Sui fund.
As of the end of August, the total TVL in the DeFi sector was $64 billion, down 16.8% from the end of July.
**Data Source:** August 2024 Public Chain TVL
Among the top 15 chains by TVL, Sui was the only chain to achieve growth, with a monthly growth rate of 41.8%. The largest DeFi project on Sui, NAVI Protocol, offers lending and liquid staking products, with its TVL skyrocketing by 72.0%, from $140 million on August 1 to $230 million by the end of the month.
Despite a 1.3% decline in Polygon’s TVL since July, the prediction market Polymarket attracted considerable attention. Influenced by the U.S. election cycle, Polymarket’s monthly trading volume increased by 22.2% to $470 million, with the number of traders surging by 46.1% to 83,000. Polymarket’s TVL grew by 19.6% in August, reaching $110 million, ranking third on the Polygon chain, behind AAVE and Uniswap. However, 78.0% of Polymarket’s total trading volume was election-related, raising questions about its ability to maintain this growth post-election.
**Data Source:** Polymarket Data Dashboard
Meanwhile, the arrest of Telegram founder Pavel Durov in France had a direct impact on TON’s performance. In August, TON’s TVL plummeted by 53.1% as institutional investors withdrew to avoid potential risks.
**Bitcoin Layer 2**
As of August 31, the TVL of Bitcoin Layer 2 (including sidechains) reached $1.09 billion, representing a 5.8-fold increase since January 1, 2024, and an astonishing 18.7-fold increase since January 1, 2023.
Bitlayer leads this field, accounting for 32.7% of the total TVL, followed by Core at 16.3%, Rootstock at 14.6%, and Merlin at 12.0%.
**Data Source:** Bitcoin Ecosystem Public Chain TVL
In terms of individual DeFi projects on single chains, the top 10 projects account for 64.6% of the total TVL, with Avalon Finance (Bitlayer), Pell Network (Core), and MoneyOnChain (Rootstock) leading, representing 16.7%, 7.2%, and 6.6%, respectively.
**Data Source:** Bitcoin Ecosystem Public Chain TVL
Considering the multi-chain TVL of the projects, Pell Network operates across seven chains, leading with a 22.9% market share, while Avalon Finance operates across three chains, closely following with a 22.8% market share. The top 10 projects collectively occupy 77.5% of the total market share.
**Data Source:** Bitcoin DeFi Project TVL (Multi-Chain Summary)
For a more in-depth analysis of Bitcoin Layer 2, please refer to our latest research report co-published with CoinMarketCap: “BTCFi: Analyzing the Bitcoin DeFi Ecosystem Based on On-Chain Data.”
**Ethereum Layer 2**
As previously mentioned, Ethereum faced numerous challenges in August, and its Layer 2 network was no exception. Arbitrum One, Optimism, and Base continued to dominate the TVL market share, holding 50.2%, 20.0%, and 8.2% respectively, with little change in TVL compared to the previous month.
DeGate saw a significant increase in TVL of 20.6%, Scroll grew by 7.4%, and Taiko rose by 7.1%. However, Blast decreased by 18.8%, and zkSync fell by 8.8%.
**Data Source:** August 2024 Ethereum Layer 2 Overview – Rollups (Bridging Related Metrics)
Overall, user activity on Ethereum Layer 2 remains sluggish, indicating a need for a new wave of innovation and more attractive applications to re-engage users. Against the backdrop of strong performance from Bitcoin Layer 2 this year, the Ethereum Layer 2 ecosystem may require a new narrative and stronger user engagement to regain momentum.
This month, Soneium became a hot topic. On August 23, the Sony Blockchain Solutions Labs, co-initiated by Sony Group and Startale Labs, announced the launch of a new Layer 2 network based on Ethereum—Soneium. This network will utilize Optimism’s OP Stack technology, spanning gaming, entertainment, and finance, combining Web3 innovations with consumer applications.
**Soneium**
In the week following the announcement, Soneium made rapid progress, including the launch of the “Minato” testnet, initiation of the “Soneium Spark” program for developers, and partnership with Transak to provide global fiat deposit services. As industry giants like Sony continue to enter the blockchain space, there is growing optimism about bringing more users into the Web3 ecosystem.
**Blockchain Games**
In August, a total of 1,492 games were active across various blockchain networks, representing a 5.45% decrease from July.
BNB, Polygon, and Ethereum led the market with market shares of 20.2%, 17.4%, and 17.0%, respectively. Ronin, opBNB, Nebula (SKALE subnet), and NEAR performed well in terms of daily active users (DAUs), averaging 1.34 million, 691,000, 349,000, and 321,000, respectively. As of the end of August, these chains accounted for 28.0%, 23.8%, 8.8%, and 6.6% of the DAU market share.
**Data Source:** Daily Active Users of Blockchain Games Across Public Chains
Ronin’s DAU market share continued to decline during August, dropping from 38.1% on August 1 to 28.0% by August 31. Nevertheless, Ronin’s average DAU in August was still nearly double that of the following opBNB. This downward trend was primarily driven by the performance of the game Lumiterra, whose DAUs fell from 600,000 at the beginning of the month to 150,000 by the end.
Additionally, on August 6, Ronin’s cross-chain bridge was paused due to a white-hat hacker attack that revealed a critical misconfiguration in the cross-chain bridge upgrade proposal. Approximately $12 million worth of cryptocurrency was transferred. Although the issue was quickly resolved and all funds were recovered, this incident had some impact on activity within the Ronin ecosystem.
In contrast, opBNB’s DAU share rose from 17.5% in August to 23.8%. By August 31, its market share had nearly doubled from 13.1% on July 1. The game SERAPH: In The Darkness, launched on opBNB in mid-July, garnered significant attention, with its DAUs increasing from 187,000 on August 1 to 515,000 by the end of the month.
Nebula also saw a market share increase, rising from 7.6% to 8.8%. As a SKALE subnet using a “zero Gas Fee” model, Nebula’s growth was driven by games such as Yomi Block Puzzle, moteDEX, and Haven’s Compass.
For more trends in the blockchain gaming industry, please read “August 2024 Blockchain Gaming Report: User Growth Amidst Cryptocurrency Market Volatility.”
**Funding Situation**
In August, there were a total of 12 funding events in the public chain sector, totaling $118 million, representing a 20.1% increase from July. Notably, four of these funding events did not disclose specific amounts.
**2024 August Public Chain Funding Events (Data Source: crypto-fundraising.info)**
The increase in overall funding this month was primarily driven by a significant funding event. July’s largest funding round was Caldera’s $15 million Series A, while August was notably boosted by Story Protocol’s $80 million Series B financing.
Core contributors to Story Protocol, PIP Labs, received this funding with the backing of venture capital giant Andreessen Horowitz (a16z). Story Protocol aims to revolutionize intellectual property (IP) management by transforming IP into modular, programmable “IP Legos.” These assets can be authorized, managed, and monetized through smart contracts on the blockchain. Story Protocol empowers creators to directly embed licensing and royalty terms within their intellectual property, providing greater control over their data. The project’s mainnet is expected to launch later this year, generating significant anticipation.
**Story Protocol**
In addition to Story Protocol, three Layer 1 blockchains, including Quai Network, U2U Network, and Particle Network, secured new funding in August. In Layer 2, several projects successfully raised capital, including Ark and Nexio from the Bitcoin Layer 2 sector, Essential, Corn, and Reddio from the Ethereum Layer 2 sector, Soon from the Solana Layer 2 sector, and other Layer 2 projects such as Rivalz Network and Lync.
A noteworthy emerging trend is the increasing focus on Move Stack. Two Layer 2 blockchains, Nexio and Lync, supported by Move Stack technology, completed new funding rounds this month
