High Ethereum fees mean that many projects on Layer 1 platforms flee

As cryptocurrencies and blockchain technology evolve, the race to establish a user-friendly, highly scalable network that can be rolled out on a global scale is a tough, never-ending marathon with new competitors entering the race on a regular basis.

Bitcoin is undoubtedly the leader in cybersecurity, active users, and value in terms of capitalization, while Ethereum has so far established itself as the leading smart contract platform, albeit with difficulty, and the continuity in expanding these networks has opened the door for blockchain – Next generation protocols to break into the market.

The fragile nature of the Ethereum dynasty has come under increasing pressure in recent months as a number of emerging Layer 1 and Layer 2 protocols have launched incentive programs to attract liquidity and users into their ecosystem.

Here are some emerging Layer 1 smart contract platforms struggling to increase liquidity in the crypto market.

Fantom encourages developers

Fantom is a protocol that uses a pivot graph architecture direction to implement its consensus, and is theoretically infinitely scalable based on that design.

With high transaction speeds and low costs, Fantom has gained more and more attention in the crypto community in recent months as the Ethereum network continues to suffer from high transaction costs and slow confirmation times due to network congestion.

Activity on the network really picked up after the announcement on August 30th of a 370 million FTM incentive program to reward developers for developing new protocols on the Fantom network.

In the time since the FTM Incentive Program started, the Fantom Protocol’s Total Value Locked (TVL) from $ 691 million to a new record high of $ 1.44 billion on the 9th is the moment.

Total value locked on Fantom | Source: Defi Lama

According to the Fantom Foundation provided, $ 1.44 billion TVL makes Fantom the fourth largest Ethereum Virtual Machine (EVM) -compliant network on the market, currently adding over 20,000 new addresses and processing over 1.5 million transactions per day.

Many new NFTs and DeFis are being introduced on Fantom and it is possible that this trend will continue to grow as liquidity shifts to it.

Liquidity “rushed” to avalanche

Another network that is capturing the Ethereun network’s liquidity market share is Avalanche, an open, programmable smart contract platform designed specifically for dApps.

Activity on the Avalanche Network has increased significantly following the launch of the Avalanche Rush Liquidity Mining Incentive Program on Aug. 18, which saw $ 180 million spent on DeFi protocols and liquidity for the Avalanche ecosystem.

The program was originally integrated with Curve and Aave, two of the leading DeFi protocols on the Ethereum network, but has since been expanded to include other protocols such as SushiSwap, Benqi Finance, YAY Games, Kyber Network and ParaSwap.

Following the launch of the Incentive Program, data from Defi Llama shows the total value of the Avalanche Protocol rose from $ 311.5 million on August 18 to an all-time high (ATH) of $ 311.5 million on August 5 rose from $ 2.42 billion before a market-wide pullback reduced its value to $ 2.11 billion at press time.

Total value locked on avalanche | Source: Defi Lama

Avalanche has also introduced a number of new DeFi and NFT protocols on the network, including a partnership with trading and trading card maker Topps, which launched the Major Baseball NFT Topps Collection. League 2021 on the Avalanche network.

The ongoing migration is made possible by the launch of the Avalanche Bridge in June, which will allow users to transfer any asset on the Ethereum network to Avalanche for a fifth of the fee, previously across the bridge.

An even more densely populated competitive field

Fantom and Avalanche are two of the latest emerging Layer 1 stars to suck users off the Ethereum network, but that’s not all.

Other EVM-compatible networks that made progress earlier this year were Binance Smart Chain and Polygon. Both networks allow users to keep their assets on the Ethereum network while avoiding high base layer fees.

Top 7 Blockchain Protocols According to TVL | Source: Defi Lama

The biggest threat to Ethereum from an EVM-incompatible chain comes from Solana, which has seen the biggest surge in TVL in the past seven days, followed by the stablecoin-focused protocol Terra.

The last two notable projects include the self-modifying blockchain protocols Tezos and Algorand, which are pure proof-of-stake protocols.

Data from Defi Llama shows that the TVL of each network has increased 207% or Salvador over the past seven days.

As mentioned at the beginning of the article and shown in the TVL figure above, the Ethereum network is the dominant smart contract blockchain in terms of users, protocols, and TVLs, but the current limitations of the network have caused competitors to one small part of its market.

It remains to be seen whether Ethereum 2.0 can solve the pending problems or whether a next-generation protocol will rise to the top and offer the ultimate 3-in-1 solution that offers decentralization, security and data protection as well as scalability in an easy-to-use platform .

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Mr. Teacher

According to Cointelegraph

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