June 2024 Public Chain Report: Market Pullback and Layer 2 Developments

July 2024, Stella L ( [email protected] )

*Data Source: * Public Chain Research Page

June witnessed notable developments and challenges in the crypto market. Bitcoin faced pressure from the impending Mt. Gox repayments and government liquidations, causing market uncertainty. Despite progress towards U.S. spot Ether ETFs, public chains saw a market cap decline of 7.7%, with Bitcoin and Ethereum leading but falling in value. Toncoin, TRON, and Kaspa were exceptions, experiencing gains. Meanwhile, TVL in public chains dropped 18.7%, though Core Chain saw significant growth. Ethereum Layer 2s and Bitcoin scaling solutions showed varied performance, and Solana gaming Layer 2 Sonic joined the Layer 2 landscape.

Data for this report was obtained from Footprint Analytics’ public chain research page — an easy-to-use dashboard containing the most vital stats and metrics to understand the public chain industry, updated in real-time.

Crypto Macro Overview

Ongoing and expected selling pressure from multiple sources weighed heavily on Bitcoin. Trustees for the Mt. Gox bankruptcy estate announced on June 24 that Bitcoin and Bitcoin Cash repayments would begin in July 2024, causing uncertainty about creditors’ conversion to fiat and the timeline. Additionally, U.S. Spot Bitcoin ETFs experienced net outflows in the second half of June.

Government actions also played a significant role. A German government agency began liquidating Bitcoin confiscated in 2013, sending nearly 4,000 BTC to exchanges in June. The U.S. government transferred 3,940 BTC to Coinbase. It was seized from a convicted drug trafficker’s wallet.

Weakness in Bitcoin appeared to spill over to the broader crypto market, despite progress toward listing spot Ether ETFs in the U.S. market.

Public Chain Overview

In June, the crypto markets experienced a pullback. By month end, the total market cap of public chain cryptocurrencies dropped by 7.7% from May, settling at $1.95 trillion. Leading the market were Bitcoin, Ethereum , BNB Chain , and Solana, holding market shares of 63.3%, 21.2%, 4.4%, and 3.5%, respectively.

Source: Public Chain Token Market Cap Share

Bitcoin saw a decline, starting the month at $67,730 and closing at $62,795, a drop of 7.3%. Similarly, Ether mirrored this downward trend, beginning at $3,820 and ending at $3,444, resulting in a 9.8% decrease.

Source: BTC Price & ETH Price

Despite a general decline in token prices throughout June, three tokens among the top 15 by market cap bucked the trend, experiencing gains in both price and market cap: Toncoin, TRON, and Kaspa.

Toncoin stood out, buoyed by its Open League token incentives program and the rising popularity of Telegram games. TON achieved an all-time high (ATH) price of $8.2 in mid-June, defying the broader market’s sluggishness.

TRON saw a 10.8% increase in token price over the month, recovering to mid-May levels and continuing an upward trend that began in February 2024.

Kaspa, a Layer 1 network utilizing a blockDAG (Block Directed Acyclic Graph) architecture, recorded a remarkable 37.7% increase in token price in June, reaching an ATH of $0.19 on June 30. Interest in Kaspa has been growing, exemplified by Bitcoin miner Marathon Digital (MARA) diversifying its mining operations to include Kaspa, marking its transition to a multi-coin crypto miner.

Source: Public Chain Token Market Cap and Price

At the end of June, the TVL in public chains stood at $72.2 billion, marking an 18.7% decline from May. Ethereum, TRON, and BNB Chain continued to lead in TVL.

Among the top 15 public chains, only TON saw an increase in TVL, with a significant surge of 106.8%. All other chains faced declines.

Notably, Core Chain ’s TVL increased by an impressive 227.7% month-over-month. This spike followed Coinbase’s addition of CORE to its roadmap at the end of May. To bolster BTCfi, Core Chain launched several initiatives, including the Core Ignition Drop and the BTCfi Summer Hackathon, and successfully onboarded more DeFi projects.

Source: Public Chain TVL Ranking

Additionally, the Solana Foundation is rolling out tools designed to transform websites, apps, social media platforms, and QR codes into launching points for crypto transactions on the Solana blockchain. The first tool, “Actions,” enables users to complete on-chain transactions directly from websites, social media platforms, and QR codes. The second tool, “Blinks,” converts any “Action” into a shareable link. Together, these tools allow any website and application on the internet to serve as distribution points for on-chain interactions, advancing Solana’s goal of mainstream adoption.

Developments within Major Layer 1s in June 2024

BNB Chain

• BNB reached an ATH price of over $710.

• There would be a 90% reduction in gas fees after the Haber hard fork.

Solana

• Digital assets investment management firm 21Shares filed for permission from the SEC to offer spot Solana ETFs.

NEAR

• NEAR Foundation has formed Nuffle Labs with $13 million in funding to advance NEAR’s modularity and bring more decentralized development to the ecosystem.

Sui

• Sui Bridge went live on testnet with an incentive program. Sui Bridge is a native bridge purpose-built on Sui for bridging assets and data to and from Sui.

Polygon

• Polygon ID has been spun off from Polygon Labs as Privado ID, targeting the mainstream digital identity market.

Ronin

• Ronin announced plans to develop Layer 2 solutions using the Polygon Chain Development Kit (CDK).

Layer 2

In June, the U.S. Ether ETFs made some progress, but Ethereum Layer 2s still experienced a downward trend amid the market pullback. Arbitrum and Optimism remained leaders, though their TVL dropped by 10.5% and 22.2%, respectively, from May. Blast’s TVL declined by 22.0% as its Phase 1 airdrop concluded. Meanwhile, Base and Linea’s TVL remained stable, maintaining levels similar to May.

Scroll, however, saw a 42.8% increase in TVL. This surge followed the launch of the next phase of its airdrop points program, Scroll Sessions, on June 21. Session One aimed to incentivize liquidity, rewarding DeFi users who provide liquidity on DEXs.

Source: Layer 2 Overview- Rollups(Bridged)

In June, “airdrop” became a hot topic among Ethereum Layer 2s, such as zkSync and Blast, alongside LayerZero’s popular airdrop. These airdrops generated significant social media hype but were controversial. ZKsync was criticized for its lengthy airdrop period and perceived unfair distribution. LayerZero faced backlash for its stringent anti-sybil measures and the need for donations before claiming rewards. Blast’s complex reward mechanism and the gap between expected and actual rewards led to participant dissatisfaction, causing a community backlash.

Despite controversies, airdrops continue to be a valuable marketing tool in the crypto ecosystem. They effectively attract users, generate hype, and incentivize engagement. To improve future airdrops, we should focus on transparency, fairness, and simplicity.

Meanwhile, Bitcoin scaling solutions saw a surge in TVL since Q4 2023. Merlin Chain , Bitlayer, and Rootstock led the growth. Despite the market pullback in June, the Bitcoin ecosystem experienced what could be called a BTCfi summer.

Source: Bitcoin Ecosystem TVL

Developments within Major Layer 2s in June 2024

Arbitrum

• Due to ZRO (LayerZero airdrop) claims, Arbitrum’s revenue on June 20 reached its highest day ever.

Optimism

• The OP Stack has officially arrived at Stage 1 starting with OP Mainnet.

Starknet

• StarkWare announced on X that its Layer 3s were coming soon.

Blast

• The Blast Foundation was created ahead of the airdrop.

Rootstock

• DEX SushiSwap went live on Rootstock.

Merlin Chain

• Merlin Chain introduced a 210M $MERL Grant Program for ecosystem builders.

For more details on Web3 Gaming, public chain funding events, and other public chain developments for June 2024, please visit www.footprint.network or click here for more information.

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