• Q1 2023 saw an average 83% market cap increase in Layer-1 (L1) smart contract platforms, despite a 2.5% decrease in network usage.
• Ethereum generated the highest revenue in Q1, driven by its high usage and gas fees, amounting to nearly 2.8 times the combined revenue of all other L1s featured in the report.
• Stablecoin market saw an interesting reshuffle with Tether (USDT) taking the center stage and TRON witnessing a 30% boost in its stablecoin market cap.
Q1 Market Performance
Q1 2023 has seen an average 83% market cap increase in Layer-1 (L1) smart contract platforms, despite a 2.5% decrease in network usage. Stacks emerged as a top performer, energized by a renewed interest in Bitcoin programmability. Meanwhile, Ethereum maintained its dominance across several key financial and ecosystem metrics despite decreased network usage.
The shifting landscape of stablecoins, driven by the temporary USDC depeg and halt in the issuance of Paxos’ BUSD, led to an increased dominance of Tether (USDT). This change particularly favoured TRON, which witnessed a 30% boost in its stablecoin market cap.
Increased Token Staking
Every network experienced a quarter-on-quarter increase in USD terms during Q1 when it comes to staked tokens, with Stacks (403%) and Solana (125%) taking the lead. The surge in total staked tokens for each network outpaced their respective market cap growth, implying a net uptick in staked native tokens.
Validator Count Variations
A crucial aspect of the blockchain ecosystem is the validator count which varies across networks and doesn’t strictly standardize. Networks like Ethereum, Avalanche, Cardano, Polkadot, and Harmony employ some form of stake-weight limit or have different approaches to validator selection that differs from consensus protocols such as Hedera Hashgraph’s Proof-of-Stake model or Ripple’s XRP Ledger consensus protocol which use deterministic node selection algorithms for validation services performance evaluation purposes rather than stake weight limits..
Overall Q1 was full of surprises with new players emerging on top while others falling behind due to dynamic changes within the crypto space from shifts within stablecoins markets and token staking increases among many other factors leading to varied performances across networks that will be sure to shift once again as we enter into Q3 2023