The Layer 1 Landscape in 2023

Ethereum’s position as the market leader across layer 1 (L1) smart contract platforms has continued in 2023, highlighted by continued dominance in nearly all measures of network usage, such as total value locked (TVL), trading volumes, and transaction fees, among others. Transaction fees are especially useful as indicators of network adoption, as they directly reflect the dollar amount that users are willing to pay for block space over a given period of time. From this perspective, it is clear that the majority of blockchain demand in 2023 was concentrated in the Ethereum network, above all other L1s, despite notable challenges from the parallelized execution L1 segment. 

After enduring one of the most calamitous years in crypto history, marked by the collapses of Terra UST, Three Arrows Capital, Genesis, and FTX/Alameda, 2023 became a year of survival for L1 ecosystems, many of which were significantly impacted by the market-wide volatility of 2022.