Mullion-dollar incentive programs and ease of cross-chain transfers increase the value of L1 and L2-based tokens and raise TVL on their respective DeFi platforms. Solana and Fantom, strong rivals of Ethereum, appreciated more than 200% as the ETH price stagnated. Blockchain expert Jordan Finneseth says the shifting balance is due to multimillion-dollar financing initiatives launched by altcoin projects. Also, fast and low-cost transactions are other reasons for increased demand. Let’s continue with Delphi Digital data…
Alternative altcoin projects to Ethereum provide stable earnings
Jordan Finneseth says competition among tier one smart contract platforms has increased over the past few months as traders and developers continue to embrace Ethereum alternatives that offer faster transactions and lower fees. On this matter, a recent report from Delphi Digital shows that the price of Ethereum (ETH) has remained relatively stable compared to the past month, while competitors such as Solana (SOL) and Fantom (FTM) have rallied more than 200%.
One of the rises seen in Phantom (FTM), Avalanche (AVAX) and Terra (LUNA) is the launch of a multi-million dollar variety of financing initiatives designed to attract developers, investors and new liquidity into their ecosystems. These initiatives of altcoin projects have sparked a flurry of new activity and cross-chain transfers from the Ethereum Blockchain to layer one projects, and Solana has seen the biggest gains to date.
Also, when it comes to individual applications located on different blockchains, the Avalanche-based Trader Joe DeFi protocol has seen the biggest gains in terms of total value (TVL) locked in over the past seven days, with the value added to the protocol increasing, according to the analyst.
Layer 2 Blockchain platforms increase gas consumption
It wasn’t just Ethereum’s tier one competitors who saw a surge in activity over the past few months. The release of several new layer two solutions and an airdrop by decentralized derivative exchange dYdX (DYDX) has led to an increase in gas consumption with layer two protocols.
Data from Delphi Digital shows that the percentage of gas used by second-tier solutions is now over 1%, after up to 2% in early September. The DYdX protocol was among the earlier adopters of the layer two technology, thanks to its collaboration with StarkWare, and the protocol has seen a new level of effectiveness in recent weeks following the release of the DYDX governance token. This was airdropped on September 8 to users who had previously used the protocol.
Since the launch of Airdrop, TVL locked in dYdX has grown from $422 million to $554 million, and 24-hour training volume has grown from $700 million to $2.4 billion.