2025: A Year of Challenges for Layer-1 Tokens
The cryptocurrency market faced a turbulent 2025, with Layer-1 (L1) blockchain tokens experiencing severe price declines. While the market saw dramatic fluctuations, a deeper analysis reveals an interesting divergence between token prices and their underlying network activity. Was this really the end for L1 tokens, or is there more to the story?
Price Volatility and Major Drawdowns
Layer-1 tokens endured a challenging year. Ethereum, Solana, Avalanche, and Sui recorded significant drawdowns of 15.3%, 35.9%, 67.9%, and 67.3%, respectively. The hardest-hit token was TON, with an astonishing 73.8% loss. Despite the broader downward trend, some tokens like Binance Coin (BNB) and TRON (TRX) managed to rise, with gains of 18.2% and 9.8%, respectively.
This underperformance highlighted a crucial lesson for investors: market capitalization alone does not guarantee resilience in tumultuous conditions. However, a closer look at network fundamentals reveals a different story.
Network Fundamentals Remain Strong
While prices dropped, on-chain activity and revenue metrics painted a promising picture for several Layer-1 networks. According to data from Token Terminal, Tron led the revenue race, generating approximately $3.5 billion in the past year. Ethereum followed with $305.3 million, and Solana produced $206.8 million.
Fee generation further confirmed the sustained network activity. Solana led with $699.9 million in fees, while Ethereum and BNB Chain (producing $549.3 million and $260.3 million, respectively) underscored their economic relevance despite the market downturn.
Active User Metrics Defy Bearish Trends
The bearish sentiment surrounding Layer-1 tokens was challenged by active monthly user data. BNB Chain dominated with 59.8 million active addresses, followed by Solana’s 39.8 million. NEAR Protocol joined the ranks of high-usage networks with 38.7 million active addresses. Even newer networks like Sei reported 10.6 million active addresses, rivaling Bitcoin’s 10.3 million and outpacing Ethereum’s 9.3 million.
The data indicates that network participation remained robust, defying the general pessimism in the market. Many Layer-1 chains maintained or even accelerated adoption, underpinning their relevance in a competitive blockchain ecosystem.
The Key Takeaway: Substance Over Speculation
2025 highlighted a growing distinction between market speculation and fundamental value. The divergence between prices and network usage suggests this year wasn’t the end for Layer-1 chains but rather a repricing event. Economically productive networks, those driving real usage and revenue, consolidated their relevance despite the speculative premiums fading.
For interested investors or blockchain enthusiasts, this serves as a reminder to assess blockchain ecosystems based on their activity, economic output, and user engagement rather than solely on token price movements.
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