February Layer 1 Landscape Recap

The Layer 1 (L1) blockchain landscape has seen dramatic changes over the past few years, with the introduction of smart contracts on Ethereum initially paving the way for a surge in on-chain financial activity that has slowly found its way into newer, alternative L1 ecosystems. From a long-term perspective, Ethereum’s dominance in the realm of decentralized finance (DeFi) remains clear. Despite its dominance falling from 96% to 57% over the course of 2021, Ethereum reaffirmed its role as the leading smart contract platform throughout the chaos of 2022, maintaining about 59% of the total value locked (TVL) in DeFi across L1s by the start of 2023. 

On a shorter timescale, developments in the L1 landscape are more difficult to spot, particularly in smaller ecosystems where changes in capital flow or user behavior can be easily overshadowed by the scale of activities on the largest L1s. In this monthly report, we break down the major metrics across L1s in relation to the previous month and offer insight into some of the emerging trends in this continually evolving market.