The blockchain industry demonstrated robust growth in September 2024, fueled by favorable macroeconomic conditions and positive regulatory developments. Bitcoin Layer 2 solutions outperformed their Ethereum counterparts in growth, while Sui emerged as a standout performer by entering the top 15 public blockchains by market capitalization. This report examines key market movements, Layer 1 and Layer 2 developments, gaming sector trends, and significant funding activities.
Market Overview
Cryptocurrency markets displayed strong performance throughout September. Bitcoin opened at $57,429 and closed at $63,485, recording a 10.5% increase. Ethereum also posted gains, rising from $2,426 to $2,603, a 7.3% increase, though it underperformed relative to Bitcoin. The ETH/BTC ratio hit a new cycle low of 0.0386 in mid-September.
Several factors contributed to this positive momentum:
- Monetary Policy Shifts: The U.S. Federal Open Market Committee (FOMC) implemented an unexpected 50 basis point rate cut on September 18. China also introduced macroeconomic stimulus measures later in the month, providing additional support to global equity markets.
- Regulatory Progress: The U.S. Securities and Exchange Commission (SEC) approved the listing of spot Bitcoin ETP options, signaling a more open regulatory stance toward cryptocurrency products.
- Institutional Adoption: Bank of New York indicated plans to offer cryptocurrency custody services, potentially strengthening the legitimacy of digital assets within traditional finance.
- Political Support: Prominent U.S. political figures expressed support for digital assets and blockchain technology, contributing to a favorable sentiment.
Layer 1 Blockchain Analysis
The total market capitalization of blockchain cryptocurrencies reached $1.9 trillion in September, a 6.9% increase from August. Bitcoin maintained its dominance with 67.3% of the market, followed by Ethereum (16.8%), BNB Chain (4.5%), and Solana (3.9%). While Bitcoin and BNB Chain held their market shares, Ethereum’s share decreased by 0.6%, and Solana gained 0.3%.
Sui achieved remarkable growth, with its market capitalization increasing by 132.2%, entering the top 15 public blockchains for the first time and securing the 13th position.
The total value locked (TVL) in decentralized finance (DeFi) reached $68.1 billion, a 6.4% monthly increase. Sui’s TVL grew by 67.4%, driven largely by incentives from the Sui Foundation and increased on-chain activity from protocols like NAVI and the Telegram-based game BIRDS.
Key trends shaping Layer 1 development include:
- Web3 Gaming: Multiple networks, including TON, BNB Chain, Sui, and Aptos, are leveraging the Telegram ecosystem to expand their user bases.
- Stablecoin Adoption: Stablecoins are gaining traction in emerging markets, with Celo demonstrating success in Africa. Sui also announced the upcoming integration of Circle’s native USDC.
- User Experience Improvements: BNB Chain introduced a "Gas-Free Carnival," offering zero gas fees for specific transactions. Solana launched its Web3 smartphone, Solana Seeker, and Ronin introduced Ronin Waypoint, a universal account and keyless wallet solution.
These developments reflect the industry’s focus on improving accessibility and expanding blockchain adoption across diverse user groups.
Bitcoin Layer 2 Ecosystem
Bitcoin Layer 2 solutions (including sidechains) experienced substantial growth in September, with TVL reaching $1.5 billion—a 33% increase from August. Core led the sector with $440 million in TVL and a 30.5% market share, followed by Bitlayer ($390 million, 26.8%), Rootstock ($180 million, 12.3%), and Merlin ($130 million, 9.2%).
Core’s TVL grew by over 100% month-over-month, largely due to its Core Ignition Drop Season 2 campaign, which expanded beyond BTCFi into Web3 gaming. This surge enabled Core to overtake Bitlayer as the largest Bitcoin scaling solution by TVL. Bitlayer still achieved a solid 9.4% growth in TVL.
Rootstock maintained steady growth with a 12.5% increase in TVL, retaining its third-place position. Other notable performers included BSquared (42.8% TVL growth), Stacks (26.5%), and BEVM (6.3%).
Looking ahead, the Bitcoin staking protocol Babylon announced that Mainnet Phase-1 Cap-2 would launch in the second week of October. Following the rapid staking of 1,000 BTC during Cap-1, expectations are high for the next phase.
Solv Protocol expanded its Bitcoin staking ecosystem, offering new opportunities for cbBTC holders on Base and collaborating with Pendle to launch high-yield SolvBTC.BBN pools. The platform now integrates with 35 DeFi protocols across nine blockchains, utilizing Chainlink’s cross-chain technology. These developments underscore Solv’s growing role in expanding Bitcoin DeFi opportunities.
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Ethereum Layer 2 Developments
Ethereum Layer 2 solutions reached $23.2 billion in TVL (canonically bridged) in September, an 8.31% increase from August—though this growth was slower than that of Bitcoin Layer 2 solutions.
Arbitrum One, Optimism, and Base continued to dominate TVL market shares at 48.8%, 19.7%, and 8.1%, respectively. However, their collective share slightly declined as other Ethereum Layer 2 solutions gained traction.
DeGate performed strongly with a 17.9% increase in TVL, building on its 20.6% growth in August. Taiko and Scroll also grew by 7.0% and 7.4%, respectively. In contrast, Blast’s TVL declined by 18.9%, continuing a negative trend from the previous month.
The Ethereum ecosystem faced increased scrutiny regarding innovation and development. In response, Vitalik Buterin outlined future directions for the network, emphasizing higher standards for Layer 2 solutions.
Buterin announced that starting in 2025, he would "only publicly mention L2s that have reached at least Stage 1" in blogs, speeches, and other communications. This statement underscores the importance of decentralization and security, including operational fraud proofs or validity proof schemes.
Currently, only two rollups have reached "Stage 2": DeGate and Fuel. Three others have achieved "Stage 1": Arbitrum One, Optimism, and dYdX V3. This classification sets a high benchmark for projects within the ecosystem and highlights the maturation of Ethereum Layer 2 solutions.
Blockchain Gaming Sector
The number of active blockchain games increased to 1,563 in September, a 4.5% rise from August. BNB Chain, Polygon, and Ethereum maintained their dominance, accounting for 22.0%, 18.6%, and 14.8% of games, respectively.
The landscape of daily active users (DAU) shifted significantly. opBNB, Ronin, and Nebula (a SKALE subnet) were the top-performing chains, with average DAUs of 1.1 million, 1.1 million, and 458,000, respectively. By the end of September, these chains held DAU shares of 28.2%, 20.1%, and 9.2%.
opBNB demonstrated remarkable growth, with average DAU surging 62.0% month-over-month. Its market share increased from 22.4% to 28.2%, driven by the popularity of SERAPH: In The Darkness and the mid-September launch of Elfin Metaverse, an eSports platform and open-world元宇宙.
In contrast, Ronin’s DAU share declined from 29.5% in August to 20.1% in September, largely due to decreased performance of Pixels, whose DAU fell from over 700,000 to 470,000. This reversal marked a significant shift in the competitive landscape.
Sui’s average DAU grew by 48.4% to 92,000, buoyed by the success of the Telegram game BIRDS, which attracted a large user base in its first week. This success highlights the trend of blockchain games leveraging Telegram for user acquisition.
Funding and Investments
Funding activity in the public blockchain sector accelerated in September, with 11 fundraising events totaling $170 million—a 47.3% increase from August. Three of these events did not disclose specific amounts.
Two major funding events drove this surge:
- The Celestia Foundation raised $100 million in a round led by Bain Capital Crypto, bringing its total funding to $155 million. Celestia, launched in 2023, offers a modular architecture that separates consensus and data availability from execution, providing greater flexibility for Layer 2 rollup developers. However, the announcement drew community skepticism, with some alleging that the funding round was an over-the-counter token sale that occurred months earlier.
- Bitget and Foresight Ventures invested $30 million in the TON blockchain to strengthen Telegram-based projects, particularly "tap-to-earn" games like Hamster Kombat and Notcoin.
Additional Layer 1 blockchains securing funding included Initia, Octra, and Aptos. Layer 2 solutions also attracted investor interest, with Bitcoin Layer 2 Zulu Network and Ethereum Layer 2 solutions like RISE Chain, Kroma, and t1 protocol receiving support. Hemi Network and AminoChain also completed funding rounds.
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Frequently Asked Questions
What drove Bitcoin Layer 2 TVL growth in September?
Bitcoin Layer 2 TVL growth was largely fueled by incentive campaigns and expanded use cases beyond BTCFi. Core’s Ignition Drop Season 2 introduced Web3 gaming elements, significantly boosting activity and total value locked.
How did Sui perform in September?
Sui demonstrated exceptional growth, entering the top 15 public blockchains by market capitalization for the first time. Its TVL increased by 67.4%, and its average daily active users grew by 48.4%, supported by successful dApp launches and Telegram-based gaming integration.
What is Vitalik Buterin’s new stance on Layer 2 mentions?
Buterin announced that starting in 2025, he will only publicly discuss Layer 2 solutions that have reached at least "Stage 1" decentralization. This emphasizes the importance of fraud proofs, validity proofs, and enhanced security in Ethereum’s scaling ecosystem.
Which blockchain led in gaming activity?
opBNB emerged as a leader in blockchain gaming, achieving a 62% increase in daily active users and surpassing Ronin in total DAU. This growth was driven by popular game titles and new platform launches.
What were the major funding events in September?
Celestia’s $100 million raise and a $30 million investment in TON were the most significant funding events. Both aimed at expanding modular blockchain infrastructure and Telegram-based ecosystem development, respectively.
How is Telegram influencing blockchain adoption?
Telegram’s integration with networks like TON and Sui has enabled rapid user acquisition through mini-apps and games. Notcoin and Hamster Kombat demonstrated the potential of tap-to-earn models, driving substantial on-chain activity.