The competition among the layer-one (L1) smart contract platforms has been increasing in the past several months as the traders and developers continue to embrace Ethereum network alternatives that deliver quicker transaction times and lower fees.
Some multi-million dollar incentive programs coupled with the ease of cross-chain transfers are enhancing the value of L1 and L2-based tokens and increasing the cumulative value locked in their associated decentralized finance (DeFi) platforms.
Based on a recent report from Delphi Digital, the price of ETH has remained relatively unchanged in the past month while competitors like Fantom (FTM) and Solana (SOL) have seen their prices explode by over 200% within the same period.
One of the key drivers of this rally period in Avalanche (AVAX), Fantom (FTM), and Terra (LUNA) is the fact that each of them has launched a variety of multi-million dollar funding initiatives that are designed to attract investors, developers, and new liquidity to their ecosystems.
Many of these initiatives are believed to have sparked a flurry of new activity and cross-chain transfers from the Ethereum network to the layer-1 projects and up to today, Solana has seen the most significant gains.
When it comes to the individual applications situated on the various blockchains, the Avalanche-based Trader Joe DeFi protocol has seen the largest gain in terms of total value locked over the last seven days as the value locked on the protocol has increased by 57%.
Layer-2 Platforms Increase Gas Consumption
It is now not just Ethereum’s layer-one competitors that have seen significant growth in activity in the last several months. The launch of many layer-two solutions and an airdrop by the decentralized derivatives exchange dYdX (DYDX) have resulted in an increase in gas consumption by layer-two protocols.
Data acquired from Delphi Digital indicates that the percentage of gas used by layer-two solutions is now above 1% after surging as high as 2% in early September. The dYdX protocol was one of the earlier adopters of layer-two technology due to a collaboration with Starkware.
In the process, the protocol has experienced a new level of activity in recent weeks after the release of its DYDX governance token that was airdropped on September 8 to the users who had previously used the protocol.
Since that airdrop release, the TVL locked on the dYdX has increased from $422 million to around $554 million, and its 24-hour trading volume has surged from $700 million to highs of $2.4 billion. Experts expect more growth in these sectors in the coming months.