In the ever-evolving world of cryptocurrencies and blockchain technology, the race to establish a highly scalable and user-friendly network capable of being adopted on a global scale is an endless marathon in which new competitors regularly join the race.
Bitcoin is undoubtedly the market leader when it comes to network security, active users, and market capitalization value, while Ethereum has so far established itself as the leading smart contract platform, but the continuing difficulty in making that These networks scale has opened the door for the next. -generation blockchain protocols to gain a foothold in the market.
The tenuous nature of Ethereum’s reign has begun to come under further pressure in recent months, as several promising protocols based on layer one and layer two have launched incentive programs to attract liquidity and users to their ecosystems.
Here’s a look at some of the rising layer one smart contract platforms that are vying for greater liquidity share in the cryptocurrency market.
Fantom incentivizes developers to migrate
Fantom is a protocol that uses a directed acyclic graphical architecture to realize its consensus and is, in theory, infinitely scalable based on this design.
The high-speed, low-cost nature of the network has been gaining increased attention from participants in the crypto community in recent months as the Ethereum network continues to suffer from high transaction costs and slower confirmation times due to congestion of network.
Activity on the network really started to pick up after the August 30 announcement of a 370 million FTM incentive program aimed at rewarding developers building new protocols on the Fantom network.
In the time since the launch of the FTM incentive program, the total locked value (TVL) in the Fantom protocol has risen from $ 691 million to a new record of $ 1.44 billion on September 9, according to data from Defi. Call.
According to data provided by the Fantom Foundation, a TVL of $ 1.44 billion makes Fantom the fourth largest network on the market that supports the Ethereum Virtual Machine (EVM) and is currently adding more than 20,000 new addresses and processing more than 1.5 million transactions. daily.
Multiple new non-fungible token (NFT) and decentralized finance (DeFi) protocols are rolling out online, and this trend may continue to increase as liquidity migrates to Fantom.
Liquidity “rushes” to Avalanche
Another network that has been draining liquidity from the Ethereun network is Avalanche, an open and programmable smart contract platform specifically designed for decentralized applications.
Activity for the protocol saw a significant increase following the launch of the Avalanche Rush DeFi Incentive Program on August 18, which dedicated $ 180 million to DeFi protocols and liquidity for the Avalanche ecosystem.
The program was initially integrated with Curve and Aave, two of the main DeFi protocols on the Ethereum network, but has since expanded to include other protocols, such as SushiSwap, Benqi Finance, YAY Games, Red Kyber and ParaSwap.
Following the launch of the incentive program, data from Defi Llama shows that the total value locked in the Avalanche protocol increased from $ 311.5 million on August 18 to an all-time high of $ 2.42 billion on August 5. September before a market-wide pullback fell. its value at $ 2.11 billion at the time of this writing.
Avalanche has also seen a number of new DeFi and NFT protocols launched on the network, including a partnership with trading and collectible card maker Topps, which thrown out his “Topps 2021 Major League Baseball Kickoff NFT Collection” on the Avalanche network.
The ongoing migration was made possible by the launch of the Avalanche Bridge in June, and this allowed users to transfer any asset on the Ethereum network to Avalanche at one-fifth of the cost previously required through the bridge.
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A competitive field fills up even more
Fantom and Avalanche are two of the most recent rising stars in the layer one game that have been diverting users from the Ethereum network, but they are far from the only ones.
Other EVM-compatible networks that advanced earlier in the year are Binance Smart Chain and Polygon. Both networks allow users to keep their assets on the Ethereum network while avoiding high fees on the base layer.
The biggest threat posed to Ethereum by a non-EVM-compliant chain comes from Solana, which has seen the biggest gain in TVL in the past seven days, followed by the stablecoin-focused Terra protocol.
Two final notable mentions include the Tezos and Algorand self-modifying blockchain protocol, which is a pure proof-of-stake protocol.
Data from Defi Llama shows that each network’s TVL increased by 207% and 71%, respectively, over the past seven days, while their token prices soared near their all-time highs thanks to protocol updates and, in the case of Algorand, the adoption by the government of El Salvador.
It remains to be seen if Ethereum 2.0 will solve the problems faced or if a next-generation protocol will rise to the top and offer the optimal solution to the blockchain trilemma of providing decentralization, security, and scalability in one easy-to-use platform.
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