So, Where Were We?
Prior to all the carnage that came packaged together with the bear market of 2022, layer 1s had somewhat of a “predictable” path mapped out. The two top dogs were ETH and Solana, and I think many expected this trend to continue. Unfortunately, FTX managed to absolutely decimate Solana, at least in the short-term, that is. In terms of market cap ranking, Solana is almost back in the Top 10 and is currently ranked number 11 at the time of writing.
Have the events of 2022 put Solana back indefinitely, or will the chain go on to recover completely and regain the TVL it once had in its heyday? This is the question! When it comes to DeFi TVL and NFTs, Solana was a dominant player. Many are now probably wondering which chains are going to be leading the pack in 2025. Avalanche had also begun to garner a lot of attention, just prior to the onset of the bear market, along with Cardano and NEAR Protocol.
Even though ETH remains the number one choice of investors, there are those, like myself who are looking for more decentralized alternatives. I do believe that other up-and-coming layer 1s are likely to experience a lot more attention than initially expected. Even though I am rather cautious in regard to Solana, I do believe that it remains a strong contender. However, I think I am most bullish on Cardano.
The Chain Of Choice
Even though ADA had an exceptional 2021, I do not believe that significant upside for Cardano has been exhausted. Much of the previous bull market’s euphoria was based on “potential”, rather than on delivery. However, much has taken place during the course of 2022 and 2023, and is likely going to mature even further and play a significant role in propelling the price of ADA significantly higher in the next bull market. I do believe that Cardano still has a way to go in terms of price discovery and real adoption.
I also expect some healthy rivalry between chains such as Avalanche and NEAR Protocol. This is likely going to take place in a competition for the Top 5 spots. In my opinion, Ethereum, Cardano, and BNB are likely to secure the Top 3 positions. There is likely to be a strong battle for the remaining positions of the Top 5. Remember, there is also Polkadot, Cosmos, and a few others. I still think that Polkadot and Cosmos have a lot to offer, and are yet to experience true market recognition.
Ultimately, I expect a battle that will go on to cement the Top 5 layer 1 chains. In a similar way that much of the focus previously fell on ETH and SOL, I expect significant focus to fall on the Top 5. This is also in line with the expected maturation and adoption that is likely to unfold in the next two years. Crypto is way too extensive to accommodate maxis… sorry guys.
To advocate for one chain is a little naive. However, I am a firm believer in one chain largely outperforming the majority, in terms of price appreciation and adoption, but that is an entirely different scenario altogether. Without diversity, creativity is stagnant. Competition is a vital aspect of growth, development, and creativity.
I am of the conviction that 2025 will “highlight” the Top 5 layer 1 blockchains, in a similar way that 2021 highlighted the Top 2 chains. Everyone knew it was either ETH or Solana… these were the heavy hitters. In 2025, I expect, at least 5 heavy hitters to dominate the layer 1 space. Who they will be, remains to be seen… it’s time to place your bets.