In the ever-evolving world of cryptocurrencies and blockchain technology, the race for a highly scalable, user-friendly network that can be rolled out on a global scale is a never-ending marathon, with new competitors entering it on a regular basis.
Bitcoin is undoubtedly the leader in terms of network security, active users, and market cap value, while Ethereum has so far established itself as the leading smart contracts platform, but the ongoing difficulty in scaling these networks has opened the door for the next-generation of Blockchain Protocols to Enter the Market.
The meager nature of Ethereum’s rule has come under increasing pressure in recent months as several emerging protocols have launched incentive programs on a layer-one and layer-two basis to add liquidity and users to their ecosystems.
Here’s a look at some of the emerging layer-one smart contract platforms vying for increased liquidity in the crypto market.
Fantom motivates developers to migrate
Fantom is a protocol that uses directed acyclic graph architecture to perform its consensus and is theoretically infinitely scalable based on this design.
The fast and inexpensive nature of the network has gained increasing 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 network congestion.
Activity on the network really picked up after the announcement on Aug. 30 of a 370 million FTM incentive program aimed at rewarding developers who create new protocols on the Fantom network.
In the time since the FTM Incentive Program started, the Fantom Protocol’s Total Value Locked (TVL) has risen from $ 691 million to a new record high of $ 1.44 billion on September 9, based on Data from Defi Llama.
Corresponding data The $ 1.44 billion TVL provided by the Fantom Foundation makes Fantom the fourth largest Ethereum Virtual Machine (EVM) -compatible network on the market, currently adding more than 20,000 new addresses and processing over 1.5 million transactions daily.
Several new non-fungible token (NFT) and decentralized finance (DeFi) protocols are being rolled out on the network, and it is possible that this trend will continue to grow as liquidity migrates to Fantom.
Liquidity “rushes” to Avalanche
Another network that has drained liquidity from the Ethereun network is Avalanche, an open, programmable smart contract platform that was specially developed for decentralized applications.
Activity for the protocol saw a significant spike following the launch of the Avalanche Rush DeFi Incentive Program on Aug. 18, which provided $ 180 million in DeFi protocols and liquidity for the Avalanche ecosystem.
The program was originally integrated with Curve and Aave, two of the best 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 of $ 2.42 billion on September 5, before a market-wide pullback, its value fell to $ 2.11 billion at the time of writing.
Avalanche has also introduced a number of new DeFi and NFT protocols on the network, including a partnership with collector and trading card maker Topps, the started his “2021 Topps Major League Baseball Inception NFT Collection” on the Avalanche Network.
The ongoing migration was made possible by the launch of the Avalanche Bridge in June, which enabled users to transfer any asset on the Ethereum network to Avalanche at a fifth of the cost previously required across the bridge.
Related: As Bitcoin debuts in El Salvador, Honduras and Guatemala are investigating CBDCs
A competitive field becomes even more crowded
Fantom and Avalanche are two of the newer emerging stars in the Layer One game that have pulled users off the Ethereum network, but they are nowhere near alone.
Other EVM-compatible networks that made advances earlier this year include the Binance Smart Chain and Polygon. Both networks allow users to keep their assets on the Ethereum network while avoiding the high fees on the base layer.
The biggest threat to Ethereum from a non-EVM compatible chain comes from Solana, which has seen the biggest gain on TVL in the past seven days, followed by the stablecoin-focused protocol Terra.
Two last notable mentions are the self-changing blockchain protocol Tezos and Algorand, which is a pure proof-of-stake protocol.
Data from Defi Llama shows that the TVL of each network has increased 207% over the past seven days, respectively, by the government of El Salvador.
It remains to be seen whether Ethereum 2.0 will solve the pending problems or whether a next-generation protocol will rise to the top and offer the optimal solution to the blockchain trilemma of decentralization, security and scalability on an easy-to-use platform.
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