Layer by Layer Issue 13: Terra, Cosmos, Solana and Binance Smart Chain

The prevailing theme throughout this series has been the growing adoption of layer 1 blockchains, particularly in relation to Ethereum. Not only are there more functional L1 ecosystems to choose from, but there are also more protocols within each ecosystem to use as well. One of the clearest ways to visualize this increasing usage of alternative L1s is to look at the relative total value locked (TVL) in DeFi protocols among the different ecosystems.

Over the course of this year, L1s have been chipping away at Ethereum’s DeFi market share, even as TVL in DeFi overall has increased from about $17.2B at the start of the year to $166.6B as of this writing. Since January, the Ethereum ecosystem’s share of DeFi TVL has declined from about 98% to 61%, underscoring the extent to which users have chosen to deposit their capital in newer L1s like Binance Smart Chain or Solana.