In June, the cryptocurrency market faced notable headwinds. Bitcoin came under significant selling pressure, leading to a downturn in the total market capitalization of public blockchain tokens. Despite this, a handful of tokens defied the trend and posted gains. Total value locked (TVL) across networks declined, and Layer 2 solutions exhibited a mixed performance.
Market Overview
Ongoing selling pressure from multiple sources heavily impacted Bitcoin. The announced repayments from Mt. Gox, scheduled to begin in July 2024, introduced considerable uncertainty regarding the timing and method of creditor payouts. This event, combined with net outflows from U.S. spot Bitcoin ETFs in the latter half of the month, contributed to a bearish sentiment.
Government actions also played a role. A German government agency began liquidating Bitcoin seized in 2013, moving nearly 4,000 BTC to exchanges in June. Similarly, the U.S. government transferred 3,940 BTC, seized from a convicted drug trafficker, to Coinbase.
Although the approval process for U.S. spot Ethereum ETFs provided a positive signal, the weakness in Bitcoin appeared to spill over into the broader crypto market.
Public Blockchain Performance
The total market capitalization of public blockchain tokens fell by 7.7% month-over-month (MoM) to $1.95 trillion by the end of June. Bitcoin, Ethereum, BNB Chain, and Solana continued to dominate the market, holding shares of 63.3%, 21.2%, 4.4%, and 3.5%, respectively.
Bitcoin's price declined from $67,730 at the start of the month to $62,795, a drop of 7.3%. Ethereum also saw a decrease, falling from $3,820 to $3,444, a reduction of 9.8%.
Despite the overall downturn, three tokens within the top 15 by market cap recorded positive growth: Toncoin, TRON, and Kaspa.
Toncoin stood out, reaching a new all-time high of $8.2 in mid-June. This growth was fueled by the TON Open League token incentive program and the increasing popularity of games on Telegram.
TRON's token price increased by 10.8% over the month, returning to its mid-May level and continuing an upward trend that began in February 2024.
Kaspa, a Layer 1 network utilizing a Block Directed Acyclic Graph (blockDAG) architecture, saw its token price surge by 37.7%, also hitting a new all-time high of $0.19 on June 30. Its growing appeal was further highlighted by Bitcoin mining giant MARA expanding its operations to include Kaspa, marking a strategic shift into multi-currency cryptocurrency mining.
Total Value Locked (TVL) Analysis
The aggregate TVL across public blockchains fell to $72.2 billion by the end of June, an 18.7% decrease from May. Ethereum, TRON, and BNB Chain maintained their leading positions in this sector.
Among the top 15 chains, only TON witnessed an increase in TVL, which skyrocketed by 106.8%. All other major chains experienced declines.
Beyond the top echelon, Core Chain demonstrated exceptional growth, with its TVL surging by 227.7% in a single month. This impressive performance followed Coinbase's announcement in late May to include CORE on its roadmap. Core Chain's proactive initiatives to support BTCfi, including the launch of the Core Ignition Drop and the BTCfi Summer hackathon, successfully attracted more DeFi projects, driving its rapid TVL expansion.
Furthermore, the Solana Foundation introduced new tools designed to transform websites, applications, social media, and QR codes into starting points for on-chain transactions on the Solana blockchain. The "Actions" tool enables users to execute on-chain transactions directly from a website, social platform, or QR code, while "Blinks" turns these transactions into shareable links. These innovations aim to convert the internet into a distributed network for on-chain interaction, accelerating Solana's mainstream adoption.
Key Layer 1 Developments in June 2024
- BNB Chain: The price of BNB touched a new all-time high of $710. The network completed its Haber hard fork upgrade, which is expected to reduce Gas fees by up to 90%.
- Solana: 21Shares filed an S-1 form with the U.S. SEC for a Solana ETF.
- NEAR: The NEAR Foundation established Nuffle Labs with a $13 million grant.
- Sui: The Sui Foundation announced the launch of the Sui Bridge testnet alongside an incentive program.
- Polygon: The digital identity solution Polygon ID was spun off from Polygon Labs and rebranded as Privado ID.
- Ronin: Announced plans to develop a Layer 2 solution using the Polygon Chain Development Kit (CDK).
Layer 2 Ecosystem Performance
In June, despite progress with U.S. spot Ethereum ETFs, the Ethereum Layer 2 sector faced a downturn amid the broader market correction. Leading networks Arbitrum and Optimism saw their TVL decline by 10.5% and 22.2% MoM, respectively. Following the conclusion of its Phase 1 airdrop, Blast's TVL also decreased by 22.0%. In contrast, the TVL on Base and Linea remained relatively stable, staying close to their May levels.
Scroll was a notable exception, experiencing a significant TVL increase of 42.8%. This growth coincided with the launch of the Scroll Sessions airdrop points program on June 21. Session One specifically incentivized liquidity provision, rewarding DeFi users who supplied liquidity to DEXs.
Airdrops were a major talking point in June, with high-profile events from zkSync, Blast, and LayerZero generating significant buzz and controversy. zkSync faced criticism over a long airdrop cycle and perceived unfairness in allocation. LayerZero encountered backlash for its strict anti-sybil measures and a requirement for donations to claim rewards. Blast's complex reward mechanism and a gap between expected and actual rewards led to community dissatisfaction.
Despite the controversies, airdrops remain a valuable marketing tool within the crypto ecosystem, effectively attracting new users, generating buzz, and incentivizing participation. Future airdrop campaigns would benefit from enhanced transparency, fairness, and simplified processes.
Simultaneously, Bitcoin scaling solutions have seen their TVL surge since Q4 2023, with Merlin Chain, Bitlayer, and Rootstock leading the charge. Despite the June market pullback, the Bitcoin ecosystem is experiencing a vibrant and innovative summer.
Key Layer 2 Developments in June 2024
- Arbitrum: Saw record single-day revenue and profit, influenced by the claiming process for the LayerZero (ZRO) airdrop.
- Optimism: Announced that the OP Stack has officially entered Stage 1.
- Starknet: StarkWare announced that its Layer 3 is coming soon.
- Blast: The Blast Foundation was established and publicly shared its vision.
- Rootstock: SushiSwap expanded to the Rootstock network.
- Merlin Chain: Launched an ecosystem incentive plan involving 210 million MERL tokens.
Blockchain Gaming Sector
In June, there were 1,580 active games across various chains. BNB Chain, Polygon, and Ethereum led in market share at 22.4%, 19.5%, and 16.1%, respectively.
The sector recorded 3 million daily active users (DAU). While Ronin, Polygon, and NEAR continued to lead in DAU, they faced challenges. Ronin's DAU share was impacted by Pixels, dropping from 29.8% at the month's start to 18.4% by the end. Similarly, Polygon's share decreased from 15.1% to 8.0%, partly due to a 31.6% decline in DAU for its largest game, Matr1x FIRE.
Oasys' Layer 2, Saakuru Verse, saw remarkable DAU growth in the final ten days of June. The successful launch of three games—Copycat Killer, Panic, and Parkour Battle—by Web3 game publisher PlayGround propelled Saakuru Verse's DAU from 18,000 on June 21 to 464,000 on June 30. Its average DAU for the final week reached 379,000. If this growth is sustained, Saakuru Verse could quickly rank among the top three chains by DAU.
Additionally, opBNB performed strongly in the last week of June, achieving an average DAU of 285,000, which accounted for nearly 10% of all gaming DAU.
Public chains are actively strengthening their gaming ecosystems through initiatives like dedicated grant programs for Web3 game developers. The strategy of building application-specific chains is also gaining traction. Ronin's recent announcement to build a Layer 2 using Polygon's CDK suggests that popular games like Axie Infinity and Pixels may eventually operate on their own dedicated chains, a strategy also employed by platforms like Avalanche, Oasys, and SKALE. The success of this approach remains to be seen.
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Frequently Asked Questions
What caused the crypto market downturn in June?
The market faced selling pressure from several sources. The impending Mt. Gox Bitcoin repayments created uncertainty, while government agencies in Germany and the U.S. moved seized Bitcoin to exchanges. Additionally, U.S. spot Bitcoin ETFs experienced net outflows, contributing to the bearish sentiment.
Which cryptocurrencies performed well despite the market dip?
Toncoin (TON), TRON (TRX), and Kaspa (KAS) were outliers. TON grew due to incentives and Telegram game integrations, TRX continued a longer-term positive trend, and KAS saw significant price appreciation and adoption by a major mining company.
What is Total Value Locked (TVL) and why is it important?
TVL represents the total amount of assets deposited in a blockchain's decentralized applications (dApps), primarily in DeFi protocols. It's a key indicator of the health, activity, and adoption of a blockchain network, as it shows how much capital is being utilized within its ecosystem.
How did Ethereum Layer 2 networks perform in June?
Performance was mixed. Major players like Arbitrum and Optimism saw their TVL decline. However, Scroll demonstrated strong growth following an incentive campaign. The month was also dominated by discussions and controversies surrounding major airdrops from networks like zkSync and Blast.
What trends are emerging in blockchain gaming?
There is a clear trend towards chains offering grants to attract game developers. Furthermore, the concept of dedicated gaming chains or Layer 2 solutions is gaining popularity, as seen with Ronin's plans and the success of chains like Saakuru Verse, which focus on a superior gaming experience.
Were there any significant fundraising events in the public chain sector?
Yes, the sector saw 11 funding rounds totaling $71.5 million, though this represented a 20.3% decrease from the previous month. Notable raises included $12 million for Sonic, a gaming-focused Solana Layer 2, and $3 million for Decent Land Labs to develop a sovereign Layer 1 blockchain.