In the ever-evolving world of cryptocurrencies and Blockchain technology, the race to establish a highly scalable and user-friendly network capable of being adopted on a global scale is an endless marathon in which new competitors are periodically added to the network. career.
Bitcoin is undoubtedly the market leader when it comes to network security, active users and market capitalization value, while Ethereum has so far established itself as the leading smart contract platform, But the continuing difficulty in getting these networks to scale has opened the door for next-generation blockchain protocols to take hold in the market.
The tenuous nature of Ethereum’s reign has begun to come under further pressure in recent months as several promising layer one and two protocols have launched incentive programs to attract liquidity and users to their ecosystems.
Next, we take a look at some of the layer one smart contract platforms that are competing for a higher share of liquidity in the cryptocurrency market.
Fantom incentivizes developers to move into its ecosystem
Fantom is a protocol that uses a directed acyclic graph architecture to perform its consensus and is, in theory, infinitely scalable based on this design.
The high-speed, low-cost nature of the network has been gaining the attention of participants in the crypto community in recent months as the Ethereum network continues to suffer from high transaction costs and slow confirmation times due to network congestion.
Activity on the network actually started to increase following the announcement on August 30 of a 370 million FTM incentive program aimed at rewarding developers who design new protocols on the Fantom network.
In the time since the launch of the FTM incentive program, Total Blocked Value (TVL) on the Fantom protocol has risen from $ 691 million to a new record of $ 1.44 billion on September 9, according to data from Defi Llama.
According data provided by the Fantom Foundation, a TVL of USD 1.44 billion makes Fantom the fourth Ethereum Virtual Machine (EVM) compatible network on the market and is currently adding more than 20,000 new addresses and processing more than 1.5 million transactions per day.
A wave of new communication protocols are being launched online. non-fungible tokens (NFT) and of decentralized finance (DeFi), and this trend may continue to increase as liquidity shifts to Fantom.
Avalanche’s “Rush” Show
Another network that has been draining liquidity from the Ethereun network is Avalanche, an open and programmable smart contract platform specifically designed for decentralized applications.
Protocol activity experienced a significant rebound after the launch of Avalanche Rush DeFi Incentive Program the 18 of August, that allocated USD 180 million to DeFi protocols and more liquidity to the Avalanche ecosystem.
The program was initially integrated with Curve and Aave, two of the main DeFi protocols on the Ethereum network, but has since expanded to include other protocols, such as SushiSwap, Benqi Finance, YAY Games, Kyber Network and ParaSwap.
Following the launch of the incentive program, Defi Llama data shows that the total value locked in the Avalanche protocol went from USD 311.5 million on August 18 to an all-time high of USD 2.42 billion on September 5, before a market-wide pullback drove its value to $ 2.11 billion at time of writing.
Avalanche has also seen the launch of a number of new DeFi and NFT protocols on the network, including a partnership with trading card maker Topps, which He launched its “Major League Baseball 2021 NFT Collection” on the Avalanche network.
The ongoing migration was made possible by the Avalanche Bridge launch in June, and this allowed users to transfer any assets on the Ethereum network to Avalanche at a fifth of the cost that was previously required through the bridge.
A competitive field fills up even more
Fantom and Avalanche are two of the most recent rising stars in the layer one game that have been diverting users from the Ethereum network, but they are far from the only ones.
Other EVM-compliant networks that made their way earlier in the year include Binance Smart Chain and Polygon. Both networks allow users to keep their assets on the Ethereum network and avoid high base layer fees.
The biggest threat to Ethereum from a non-EVM-compliant chain comes from Solarium, which has seen the highest TVL gain in the last seven days, followed by the protocol Terra, focused on stablecoins.
Last two notable mentions include the self-friendly blockchain protocol Tezos and Algorand, which is a pure proof of stake protocol.
Defi Llama data shows that each network’s TVL increased 207% and 71%, respectively, in the past seven days, while their token prices soared near their all-time highs thanks to protocol updates and, in the case of Algorand, for adoption by the government of El Salvador.
It remains to be seen if Ethereum 2.0 will solve the problems it faces or if a next-generation protocol will take the throne and offer the optimal solution to the blockchain trilemma of offering decentralization, security, and scalability in one easy-to-use platform.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Each investment and trade movement involves a risk, you must carry out your own research when making a decision.
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