Messari's Q2 Report On The State Of L1 Blockchains In 2023


In the dynamic realm of blockchain technology,


provides a riveting snapshot of Layer 1 (L1) blockchains’ performance, revealing some startling trends and novel insights. This report serves as a gateway to understanding the intricate dance of innovation, adoption, and rivalry within the L1 space.


It compares the financial, network, and ecosystem performances of fifteen Layer-1 (L1) smart-contract platforms, including Ethereum, and highlights key insights from Q2’23.

Follow along as we break down the key findings and explore the implications they hold for the future of blockchain technology.

Read Messari’s Full Q2 2023 State of L1’s Report Here



  • πŸš€ Ethereum (ETH) outperformed other featured L1 tokens in Q2’23, with a 3% market cap increase driven by the Shapella upgrade, meme coin activity, and regulatory catalysts.
  • πŸ’§ Liquid staking protocols and tokens gained attention, replacing native tokens in DeFi and leading to innovations like LST-backed stablecoins.
  • πŸš€ Cardano led in DeFi growth, despite challenges in stablecoin market cap, while Avalanche’s C-Chain saw significant growth due to LayerZero activity.
  • πŸ”— LayerZero’s cross-chain messaging protocol increased network usage, attracting developers and integrations.
  • πŸ’° Market cap decreased by 6% QoQ for featured L1s, with Ethereum holding 73% of the combined market cap.
  • πŸ’Έ Ethereum and TRON generated 93% of total revenue among featured L1s in Q2’23.
  • πŸ’Ή Ethereum’s revenue spiked during the meme coin craze in late April and early May.
  • πŸ”₯ BNB Chain led with a 5.9% deflation rate, followed by TRON, while ETH became slightly inflationary towards the end of the quarter.

πŸ“Š Distributions:

  • 🧩 Stacks: 96.5% of its original distribution vested, 0.7% unlocking in Q3’23 to its treasury.
  • 🌐 NEAR: 81.6% of its original distribution vested, 2.9% unlocking in Q3’23 to grants, core contributors, and investors.
  • πŸš€ SKALE: 76.7% of its original distribution vested, 1.9% unlocking in Q3’23 to its core contributors.
  • πŸ”οΈ Avalanche: 76.0% of its original distribution vested, 2.6% unlocking in Q3’23 to core contributors, strategic partners, foundation, and community.
  • ☘️ Hedera: 64.5% of its original distribution vested, 3.7% unlocking in Q3’23 to ecosystem programs, investors, and core contributors.


πŸ’° Staking Yield:

  • 🌟 Tokens like BNB, ETH, and STX with low inflation allow holders to freely use the token without being penalized for not staking.
  • πŸ’Ή Tokens with higher inflation rates optimize for higher stake rates.
  • πŸ”„ Liquid staking introduces liquidity, smart contract risk, and tax implications.
  • 🌐 Cardano and Tezos have liquid staking enabled at the protocol level.


πŸ“ˆ Network Analysis:

  • πŸ“Š User activity is unique for each network; percentage change in user activity is a better metric for comparison.
  • πŸ“ˆ Avalanche C-Chain led QoQ transaction growth at 162%.
  • πŸ“ˆ Avalanche C-Chain led QoQ growth in daily active addresses at 142%.
  • πŸ“ˆ Avalanche C-Chain saw a 621% QoQ increase in average daily new addresses.
  • πŸ’Έ Ethereum’s average transaction fee increased 84% QoQ to $8.89.
  • 🌐 SKALE subsidizes gas fees, generating revenue from subscription fees.
  • 🌐 Ethereum has 5,407 validators, Cardano has 1,921, and Solana has 1,841.
  • πŸ“Š Cardano has a Nakamoto coefficient of 34, indicating decentralization.
  • 🌍 Factors affecting validator decentralization include geographic distribution, hosting provider distribution, delegator distribution, and client diversity.


🌐 Ecosystem Analysis:

  • πŸ’Ό DeFi TVL (USD) decreased for most networks in Q2’23.
  • πŸš€ Ethereum and TRON were the only networks with positive QoQ DeFi TVL growth.
  • πŸ’± Ethereum accounted for 56% of the stablecoin market cap among featured L1s by June 30, 2023.
  • πŸ’² USDT total supply increased by 25%, benefiting TRON.
  • πŸ“ˆ Ethereum continued to lead in DeFi Diversity with 21 protocols.
  • πŸ›’ Combined averaged daily DEX volume of featured L1s declined 32% QoQ.
  • πŸ’Ή BNB Chain and Cardano had significant QoQ increases in daily DEX volume.
  • 🎨 Daily NFT volume decreased to yearly lows in Q2’23.
  • πŸ“‰ Azuki’s Elementals launch faced backlash, affecting NFT floor prices.
  • πŸ“‰ Average daily unique NFT buyers declined for Ethereum and Solana.
  • πŸš€ WAX witnessed growth in NFT buyers, primarily driven by Alien Worlds.


πŸ‘¨β€πŸ’» Developers:

  • πŸ‘©β€πŸ’» Combined full-time developers across featured networks decreased by 12% to 3,876.
  • πŸ–₯️ Ethereum had 1,901 full-time developers, significantly more than other networks.
  • ⬆️ TRON and EOS experienced positive QoQ growth in full-time developers, increasing 20% and 8% respectively.


Final Thoughts


The blockchain landscape continues to evolve at an incredible pace, with Ethereum maintaining the lead in many key metrics. Despite dips in DeFi TVL and NFT volume across many networks in Q2’23, there are significant growth markers like the increasing total supply of USDT and QoQ growth in full-time developers for TRON and EOS.

It is evident from Messari’s analysis that decentralization, ecosystem diversity, and developer activity remain vital factors shaping the trajectory of these networks. As we move forward, it will be fascinating to monitor how these dynamics shift, potentially paving the way for new leaders in the blockchain space.

Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.


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