In the ever-evolving world of cryptocurrencies and blockchain technology, the race for a highly scalable, user-friendly network that can be rolled out on a global scale is a never-ending marathon, with new competitors entering it on a regular basis.

Bitcoin is undoubtedly the leader in terms of network security, active users, and market cap value, while Ethereum has so far established itself as the leading smart contracts platform, but the ongoing difficulty in scaling these networks has opened the door for the next generation of Blockchain Protocols to Enter the Market.

The weak nature of Ethereum’s rule has come under increasing pressure in recent months as several emerging protocols have launched incentive programs on a layer-one and layer-two basis to add liquidity and users to their ecosystems.

Here’s a look at some of the emerging layer-one smart contract platforms vying for increased liquidity in the crypto market.

Fantom motivates developers to migrate

Fantom is a protocol that uses directed acyclic graph architecture to satisfy its consensus and is theoretically infinitely scalable based on that design.

The fast and inexpensive nature of the network has gained increasing attention from participants in the crypto community in recent months as the Ethereum network continues to suffer from high transaction costs and slower confirmation times due to network congestion.

Activity on the network really picked up after the announcement on August 30th of a 370 million FTM incentive program aimed at rewarding developers who create new protocols on the Fantom network.

In the time since the FTM Incentive Program began, the Fantom Protocol’s Total Value Locked (TVL) has risen from $ 691 million to a new record high of $ 1.44 billion on September 9, based on Data from Defi Llama.

Total value locked on Fantom. Source: Defi Lama

According to the Fantom Foundation, Fantom is the fourth largest Ethereum Virtual Machine (EVM) compatible network on the market with a TVL of $ 1.44 billion and is currently adding more than 20,000 new addresses and processing over 1.5 million transactions daily Base.

Several new non-fungible token (NFT) and decentralized finance (DeFi) protocols are being rolled out on the network, and it is possible that this trend will continue to grow as liquidity migrates to Fantom.

Liquidity “rushes” to Avalanche

Another network that has drained liquidity from the Ethereun network is Avalanche, an open, programmable smart contract platform specially developed for decentralized applications.

Activity for the protocol saw a significant spike following the launch of the Avalanche Rush DeFi Incentive Program on Aug. 18, which provided $ 180 million in DeFi protocols and liquidity for the Avalanche ecosystem.

The program was originally integrated with Curve and Aave, two of the main DeFi protocols on the Ethereum network, but has since been expanded to include other protocols such as SushiSwap, Benqi Finance, YAY Games, Kyber Network and ParaSwap.

Following the launch of the incentive program, data from Defi Llama shows the total value of the Avalanche Protocol rose from $ 311.5 million on August 18 to an all-time high of $ 2.42 billion on September 5, before a market-wide pullback, its value at the time of this writing fell to $ 2.11 billion.

Total value locked on avalanche. Source: Defi Lama

Avalanche has also introduced a number of new DeFi and NFT protocols on the network, including a partnership with collector and trading card maker Topps, which launched its “2021 Topps Major League Baseball Inception NFT Collection” on the Avalanche network.

The ongoing migration was made possible by the launch of the Avalanche Bridge in June, which enabled users to transfer any asset on the Ethereum network to Avalanche at a fifth of the cost previously required across the bridge.

Related: As Bitcoin debuts in El Salvador, Honduras and Guatemala are investigating CBDCs

A competitive field becomes even more crowded

Fantom and Avalanche are two of the newer rising stars in the Layer One game that have pulled users off the Ethereum network, but they are nowhere near alone.

Other EVM-compatible networks that made advances earlier this year include the Binance Smart Chain and Polygon. Both networks allow users to keep their assets on the Ethereum network while avoiding the high fees on the base layer.

Top 7 Blockchain Logs Locked by Total Value. Source: Defi Lama

The biggest threat to Ethereum from a non-EVM compatible chain comes from Solana, which has seen the biggest gain in TVL in the past seven days, followed by the stablecoin-focused protocol Terra.

Two last notable mentions are the self-changing blockchain protocol Tezos and Algorand, which is a pure proof-of-stake protocol.

Data from Defi Llama shows that the TVL of each network has increased 207% over the past seven days, respectively, by the government of El Salvador.

As mentioned at the beginning and shown in the TVL figure above, the Ethereum network is the dominant smart contract blockchain in terms of users, protocols, and TVL, but the network’s current limitations have left the door open for competitors to gain their market share .

It remains to be seen whether Ethereum 2.0 will solve the pending problems or whether a next-generation protocol will rise to the top and offer the optimal solution to the blockchain trilemma of decentralization, security and scalability on an easy-to-use platform.

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The views and opinions expressed are those of the author only and do not necessarily reflect the views of Every step of investing and trading involves risk, so you should do your own research when making a decision.


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