In March, the cryptocurrency market performed strongly, with Bitcoin reaching a new all-time high. Ethereum also experienced steady price growth, while the Cancun upgrade significantly reduced transaction costs. The Meme frenzy on the Solana chain ignited the market and had a ripple effect on other public chains like Base.
AI, Meme, and TON (The Open Network) have been the driving forces behind the mass adoption of blockchain. Public chains are also expanding the Web3 gaming ecosystem, which is crucial for widespread blockchain adoption.
This report is sourced from Footprint Analytics’ Public Chain Research page, which provides an easy-to-use dashboard with key statistics and real-time updates on the public chain sector.
Crypto Market Overview:
The cryptocurrency market performed strongly in March, mainly due to expectations of lower interest rates despite strong overall economic performance. This prospect heightened inflation concerns and made assets like Bitcoin and gold more attractive.
The AI industry became a market focus after Nvidia announced the Blackwell GPU and GB200 superchip at the AI event GTC 2024. This not only ignited enthusiasm in the US and global stock markets but also generated widespread attention in the cryptocurrency market, driving the rise of the crypto AI sector.
In late March, Sam Bankman-Fried (SBF) was sentenced to 25 years of federal imprisonment for fraudulent activities related to the collapse of FTX exchange and Alameda Research in November 2022. Although SBF and FTX’s story may come to an end, the crypto industry still faces severe regulatory challenges. It is worth mentioning that KuCoin is reportedly facing legal action from the US Department of Justice and other agencies, resulting in a significant outflow of funds.
Public Chain Overview:
As March came to a close, the total market value of public chain cryptocurrencies reached $22 trillion, a 15.8% increase compared to February. Bitcoin, Ethereum, BNB Chain, and Solana stood out in this growth, with market shares of 63.2%, 19.7%, 4.2%, and 4.1% respectively.
Bitcoin experienced significant volatility between “breakthrough” and “fluctuation.” Starting at $61,213, it quickly surpassed the previous high of $69,000 and reached a new all-time high of $73,068 on March 14. Although it temporarily dropped 15.1% to $62,047 in the middle of the month, it recovered and closed at $69,656 by the end of the month.
The price movement of Bitcoin was closely correlated with the performance of the US Bitcoin spot ETF. The mid-month price drop was mainly due to a slowdown in Bitcoin spot ETF inflows and traditional traders reducing leverage. However, the market’s expectation of the Bitcoin halving event in April maintained its upward momentum.
In contrast, Ether’s price increase was relatively stable, starting at $3,344 and closing at $3,648. Although Ether’s growth was slightly lower than Bitcoin’s, it continued to grow steadily, partly because the prospects for US spot ETF approval seemed uncertain. The Cancun upgrade of Ethereum on March 13 aimed to reduce transaction costs and promote activity within its ecosystem.
The token prices of BNB and Solana both saw significant increases of 48.8% and 56.0% respectively, resulting in an approximately 1% increase in their token market share.
AI-related tokens experienced significant growth in March. The news of Sam Altman rejoining the OpenAI board after being fired and rehired had a positive impact on AI-related tokens. Market expectations for the Nvidia GTC conference further fueled speculation and brought positive news to projects participating in the conference. It is worth noting that the token price and market value of NEAR Chain soared by 84%.
The widespread adoption of AI has not only deepened public awareness of AI but also made the concept of “AI + crypto” more widely understood and accepted. AI concept tokens have gained increasing attention, further promoting the widespread adoption of cryptocurrencies.
Memes have also played an important role in driving mass adoption in the crypto world. Recently, Solana gained attention due to the surge in Meme-related activities. Tokens like $BOME and $SLERF quickly rose in price, attracting active participation from community members. This phenomenon fully demonstrates the potential of Memes in creating wealth rapidly and has generated widespread FOMO sentiment in the market. Memes, as an accessible and understandable entry point, help lower barriers and attract more people to explore the Web3 space.
TON (The Open Network) and its closely related social app Telegram have had a significant impact on driving mass adoption. In particular, Telegram announced the expansion of its advertising platform to nearly a hundred new countries in March. This move is an important part of Telegram’s monetization strategy, allowing public channel owners to earn up to 50% of advertising revenue, with all transactions conducted through TON. This greatly promotes on-chain activities for TON. In March, the price and market value of Toncoin doubled, reaching an all-time high. With Telegram’s large user base and seamless integration of dApps, TON simplifies access to Web3. Combined with Telegram’s strong marketing capabilities, the TON ecosystem is expected to be a key driver of widespread blockchain adoption.
By the end of March, the Total Value Locked (TVL) in public chains reached $8.13 billion, with Ethereum, Tron, and BNB Chain ranking in the top three.
Solana’s TVL saw significant growth, reaching $3.59 billion, doubling the figure from February. This growth was mainly driven by the Meme frenzy, which greatly increased online activity and attracted a large influx of capital. DeFi dApps on Solana, such as the DEX aggregator Jupiter, received high attention and user participation.
Layer 2 Ethereum has reached new heights in on-chain activity and TVL with the booming crypto market and the help of the Cancun upgrade. Among them, Arbitrum One and Optimism stood out, with TVL increasing by 26.4% and 7.2% respectively, collectively occupying about 70% of the market share.
Base’s TVL increased by 87.3%, and active users (wallets) grew by 29.6%, mainly due to the attractiveness of Meme coins like $DEGEN. Additionally, the launch of Coinbase’s smart wallet further boosted the ecosystem’s activity. This smart wallet simplifies the user registration process through Account Abstraction (AA) technology, integrating Touch ID or Google account, greatly enhancing Base’s user acquisition capabilities.
After the Ethereum Cancun upgrade, the average transaction fees on Layer 2 networks saw a significant decrease. Arbitrum and Starknet reduced on-chain transaction costs by over 95%. This significant reduction in fees marks the official entry of the Ethereum ecosystem into the “one-penny era.”
Discussions about Layer 3 have become increasingly intense, with various experts expressing their views. Marc Boiron, CEO of Polygon Labs, recently questioned the necessity of Layer 3 and explained why Polygon decided not to develop Layer 3. Meanwhile, Vitalik Buterin, co-founder of Ethereum, also shared his perspective, pointing out that Layer 3 networks are not primarily used for scalability; instead, their main purpose is to provide “custom functionalities” for Layer 2 to enhance its performance.
In March, Ronin, Polygon, and BNB Chain were the platforms with the highest number of active gamers, accounting for 35.4%, 20.9%, and 10.8% of the market share respectively. It is worth mentioning that Ronin and Polygon further consolidated their leading positions, with their market shares increasing by 6.3% and 7.8% respectively compared to February.
Regarding trading volume rankings, Ethereum, Ronin, and BNB Chain dominated. In March, Ronin’s trading volume reached $81.7 million, a 35.1% increase compared to the previous month, while BNB Chain experienced a 13% decline. Despite having less than 10 games, Ronin’s market share expansion was strong. With the continuous addition of new games, its growth potential is expected to further increase.
Competition in the public chain sector is intensifying, with major public chains increasing their investments to promote the prosperity of the Web3 gaming ecosystem.
The Arbitrum Foundation announced a proposal to distribute 200 million $ARB tokens over two years to support gaming projects on its blockchain. Of this, 160 million $ARB will be allocated to game publishers and developers, while the remaining funds will be used to enhance infrastructure. This proposal requires approval from the Arbitrum DAO.
Meanwhile, the Starknet Foundation is also taking active steps and has established a dedicated gaming committee to promote the development of the Starknet gaming ecosystem. The committee plans to distribute 50 million $STRK tokens to support committee-approved gaming projects, especially those that incentivize game development and player participation.
For more information on the gaming industry, you can read the Web3 Gaming Report by Footprint Analytics: “March 2024 Web3 Gaming Report: Market Trends and Investment Dynamics.”
In March, the public chain sector experienced significant growth, with 23 financing events totaling $380 million, a 160.2% increase compared to February. Optimism, Berachain, and Eclipse stood out in this investment frenzy, receiving massive funding of $89 million, $69 million, and $50 million respectively.
In these 23 financing events, the funds were distributed in a “three-legged” pattern: 8 events involved Layer 1, 7 focused on Bitcoin Layer 2, and the remaining 8 mainly focused on Ethereum Layer 2. Although the highest disclosed investment amount for Bitcoin Layer 2 was only $10 million, the Bitcoin ecosystem has been gaining increasing attention.
Token sales are gradually becoming a popular way to raise investment and funding.
Recently, Berachain successfully completed its financing through a token sale, and its valuation has reached $1.5 billion, making it a unicorn. This platform, based on Cosmos and compatible with EVM, focuses on DeFi transactions and plans to launch its mainnet in the second quarter of 2024.
The Optimism Foundation also announced a private token sale, selling approximately 19.5 million OP tokens. These tokens were sourced from the undistributed OP token treasury and, based on the current market value, amounted to nearly $89 million. The tokens were purchased by an undisclosed buyer and will be subject to a two-year lock-up period.
Key Highlights:
– With the Meme coin frenzy, Solana’s search volume on Google surged to a peak of 100.
– Blast mainnet officially launched on March 1.
– Bitcoin Layer 2 project BEVM announced its mainnet release plan.
– CyberConnect announced the launch of the Ethereum Layer 2 network Cyber.
– Mysten Labs demonstrated the feasibility of linearly scaling blockchain with the technology prototype “Pilotfish” on Sui.
– Google now supports searching Bitcoin, Arbitrum, Avalanche, Optimism, Polygon, and Fantom on-chain wallet addresses.
– BNB Chain launched the “Rollup as a Service” (RaaS) solution.
Note: The content of this article is for industry research and communication purposes only and does not constitute any investment advice. The market involves risks, and investments should be made with caution.