2026 Layer 1 competitive landscape reshaped: how do app ecosystem, user scale, and asset circulation capabilities determine the winner among public chains?

In July 2026, the crypto market was in a choppy, oscillating pattern under macro pressure. However, fluctuations in market sentiment have not cooled the rivalry heat in the infrastructure layer. In the past few years, blockchain industry narratives have shifted significantly from a “performance race” to “ecosystem competition.” TPS (transactions per second) and Gas fees were once the core yardsticks for judging whether a public chain was superior, but this standard is being replaced by a more complex, multi-dimensional framework.

Layer 1 competition in 2026 has shifted to a debate over “modularity and monolithic architecture.” Institutional capital is no longer simply hunting for the next “Ethereum killer,” but rather for the most robust cross-chain liquidity infrastructure. Public chain competition is increasingly moving to the top of the “application stack”—the focus of competition has become applications and users, not underlying infrastructure and whitepapers. At the same time, crypto investment and financing is highly concentrated in the infrastructure sector. Last week, the crypto industry recorded 16 funding events in total. Alpaca completed a $135 million round, and Flex completed a $70 million round, continuously reinforcing the market’s long-term optimism toward digital financial infrastructure.

Against this backdrop, it becomes crucial to understand the new dimensions of blockchain competition—application ecosystems, user scale, and asset circulation capability. This article breaks down the competitive logic of the next generation of digital asset infrastructure across these three layers, using KONET (KONET) as an observation sample to analyze the path choices of payment-oriented blockchain networks in building ecosystem moats.

Elevating the Competitive Dimensions: From Technical Metrics to Ecosystem Capability

Performance has degraded from a “barrier” to a “threshold”

In the early stages of blockchain development, TPS and Gas fees were indeed the core variables separating different public chains. Solana built differentiated technical moats with high throughput, while Ethereum built them with a large validator network. But by 2026, this logic is being overturned.

In 2026, the Ethereum Foundation re-aggregated protocol work. It merged the previously relatively independent “scaling L1” and “scaling Blob” into a unified Scale roadmap. Within the same expansion framework, it increased the Gas Limit, expanded data availability, optimized execution clients, advanced statelessness, and incorporated zkEVM attester client work. This means that even a network like Ethereum, which was once known for being “slow and expensive,” is systematically improving its execution capability.

When nearly all mainstream Layer 1s continue to optimize performance parameters, the differences in technical indicators are being flattened. The marginal value of increasing TPS from 10,000 to 100,000 is far lower than adding an application with real user scenarios within the ecosystem. Performance has shifted from a “competitive moat” to an “entry threshold”—it determines whether a public chain can be considered, but no longer determines who will ultimately win.

Application ecosystem: from “how many projects” to “how many users are actually using it”

Ecosystem competitiveness is not about the number of contracts, but about users’ actual time spent and interaction frequency. To measure the health of an application ecosystem, you need to focus on three levels:

The first level is application density, meaning the number and type distribution of DApps running on the mainnet. Diverse application tracks—DeFi, games, NFTs, and real-world assets (RWA)—can cover users with different interests and investment tiers, providing multiple entry points for the ecosystem.

The second level is user stickiness, meaning daily active users, monthly active users, and user retention rate. Low transaction fees as a core platform advantage can reduce the trial-and-error barrier for users and help them join various DApps more easily. But lowering fees is only a necessary condition; what truly determines stickiness is whether the application can solve users’ real needs.

The third level is developer activity, meaning the number of full-time developers, code submission frequency, and the speed at which new projects go live. Developers’ choices often exhibit an accelerated characteristic of “network effects.” The more developers that pour in, the more complete the tools and infrastructure become within the ecosystem, which in turn attracts more developers to join.

User scale: from “number of addresses” to “real economic activity”

User scale is another key dimension for measuring ecosystem value, but “number of addresses” is an indicator that is easy to manipulate. A more informative metric is the scale of “real economic activity,” including total on-chain transaction value, DEX trading volume, stablecoin circulation, and the scale of cross-chain asset flow.

As of July 2026, Ethereum mainnet (L1) has custody of about $25B in tokenized assets (including bonds, funds, stablecoins, deposits, etc.), which is the largest among all public chains. These data reflect not just simple user numbers, but the depth and breadth of economic activity within the ecosystem.

The core value of user scale lies in its “self-reinforcing” characteristic. More users bring more transaction volume and fee revenue. More revenue attracts more validators and developers, which in turn increases the network’s security and functionality, ultimately attracting even more users. This positive feedback loop is the hardest part of an ecosystem moat to replicate.

Asset circulation capability: the core competitiveness in the cross-chain era

As blockchain ecosystems become increasingly fragmented, asset circulation capability is becoming a key variable in determining the long-term value of infrastructure projects. The cross-chain bridge market is expected to exceed $3.5 billion in 2026. The annual asset transfer volume enabled by cross-chain interoperability infrastructure has already surpassed $1.3 trillion. The blockchain interoperability market is expected to grow from $900 million in 2025 to $1.17 billion in 2026, with a compound annual growth rate of 29.2%.

Asset circulation capability includes two layers: one is cross-chain breadth, meaning how many heterogeneous blockchains can be connected; and the other is cross-chain depth, meaning the efficiency, cost, and security of asset movement between different chains.

For any digital asset infrastructure, if it cannot connect assets with other ecosystems, its value will be confined within a closed system. Cross-chain infrastructure enhances ecosystem openness and reduces the isolation effects between networks. For payment scenarios, cross-chain capability means users and enterprises can more flexibly allocate assets across different blockchain ecosystems.

KONET’s Track Positioning: An Infrastructure Lens on Payment Scenarios

After understanding the competitive framework above, KONET (KONET) can be placed into the coordinate system of the next generation of digital asset infrastructure for observation.

KONET Network is a blockchain network built for payment scenarios. It aims to provide enterprises and individuals with transparent, verifiable, and low-cost digital payment infrastructure through stablecoin settlement, an on-chain receipt system, and high-performance transaction processing capabilities. KONET uses an EVM-compatible architecture and a validator governance mechanism, and introduces the EIP-1559 fee model.

As of July 23, 2026, according to Gate market data, the price of KONET (KONET) is $0.023920, the 24-hour change is -0.22%, the 7-day change is +41.60%, the 30-day change is -28.81%, and the change over the past year is +4.21%. The market cap is approximately $11.0082 million, ranking 1,021st. Total supply is 1.00 billion tokens, and the market sentiment rating is neutral.

From the perspective of ecosystem construction, KONET’s differentiated path mainly shows up in the following areas:

Specialization for payment scenarios. Unlike public chains that aim to position themselves as “general computation platforms,” KONET focuses on the specific scenario of payments and settlement. KONET’s design goal is to establish a dedicated infrastructure layer in payments and settlement. By unifying payment records, transaction verification, and receipt management on-chain, it addresses issues common to traditional payment systems—data silos, high verification costs, and low efficiency in cross-institution collaboration. This scenario-focused strategy enables deep advantages in the vertical payment domain, rather than falling into homogenization in generalized competition.

Differentiated capabilities of the on-chain receipt system. KONET directly records payment credentials in the blockchain ledger, forming tamper-proof on-chain receipts. Enterprises can then use on-chain data for payment confirmation, reconciliation management, and audit verification. This capability extends blockchain beyond being merely a payment network into a trusted data infrastructure. For B-end customers, it directly solves pain points in traditional payments: high reconciliation costs and cumbersome audit processes.

EVM compatibility and developer ecosystem. KONET supports an EVM (Ethereum Virtual Machine) compatible environment, allowing developers to build applications using existing Ethereum tooling and smart contract frameworks. This compatibility lowers the development barrier and promotes the migration of existing Web3 applications to the KONET ecosystem. In building an application ecosystem, lowering the cost for developers to enter is the first step in kick-starting a positive feedback loop.

Deployment of cross-chain infrastructure. KONET Bridge is designed to connect KONET with other blockchain networks to enable cross-chain transfers of assets and data. In an increasingly competitive environment where asset circulation capability matters more, cross-chain capability directly affects KONET’s ecosystem openness and scalability.

Integrity of ecosystem components. The KONET ecosystem consists of the KONET mainnet, the native token KONET, the on-chain receipt system, a wallet service (KONWallet), cross-chain infrastructure, and the KONET LAB developer platform. Together, these components form a complete system for payments, verification, development, and ecosystem expansion.

It should be noted that KONET is still in the early stage of ecosystem development. Its market cap (about $11.0082 million) still differs by orders of magnitude from top Layer 1 projects, and the richness of its application ecosystem and user scale still need ongoing validation. However, based on the logic of track selection, the specialized path for payment scenarios represents a competitive mindset different from “general-purpose public chains”—building deep advantages in a vertical domain rather than laying out comprehensively across horizontal dimensions.

The Logic of Building Ecosystem Moats: A Systemic Engineering Process from Technology to Institutions

Taken together, the ecosystem moats of digital asset infrastructure are not built by a single factor, but by multiple dimensions working in concert.

At the technical level, EVM compatibility, transaction processing capability, and the fee model form the competitiveness of the base layer. But the value of these technical metrics lies in whether they can support the operation of applications on top, not in whether the technical metrics themselves are higher or lower.

At the ecosystem level, the number of applications, user scale, and developer activity form the core of the positive feedback loop. When the number of DApps in the ecosystem exceeds 5,000 and daily active users reach 3.7 million, network effects themselves become a moat that is hard to cross.

At the asset level, cross-chain interoperability and asset circulation capability determine the openness of an ecosystem. In a multi-chain coexistence landscape, any closed ecosystem system faces the risk of value loss.

At the institutional level, with institutional capital entering and regulatory frameworks becoming clearer, compliance capability is becoming a new dimension of infrastructure competition. Augustus (Augustus) obtained conditional approval from the Office of the Comptroller of the Currency to become a federal charter nationwide clearing bank, and after the end of the MiCA transition period, the total number of licensed institutions increased to 294. These developments indicate that institutional building is becoming a competitive factor in digital asset infrastructure that cannot be ignored.

As Injective CEO Eric Chen pointed out, the next phase of Layer 1 competition may no longer be determined solely by raw throughput metrics, but by the team’s ability to scale while maintaining distributed validation and minimizing systemic dependencies.

Conclusion

The blockchain industry in 2026 is standing at a clear turning point. After spending years proving that blockchain technology is workable, the challenge facing the industry is no longer creating new blockchains, but building financial infrastructure so that banks, payment companies, enterprises, and institutions can use this technology in daily operations.

Against this backdrop, the competitive logic of digital asset infrastructure is undergoing a fundamental shift. TPS and Gas fees are no longer decisive factors. Instead, the richness of the application ecosystem, the authenticity of user scale, the efficiency of asset circulation, and the completeness of institutional structures jointly form new competitive dimensions. As a payment-scenario-specialized infrastructure project, KONET’s track choice represents a differentiated path for the next generation of digital asset infrastructure—building deep advantages in vertical domains. Through infrastructure development such as on-chain receipts, cross-chain capability, and a developer platform, it constructs a payment network that connects digital asset activity with real-world economic activity.

Of course, building ecosystem moats is a long process. Whether it’s KONET or other emerging infrastructure projects, they need to keep investing across multiple dimensions such as technology iteration, ecosystem expansion, and institutional building. But the direction is clear: in the second half of blockchain competition, the winners will be those digital asset infrastructure projects that can build truly sustainable ecosystem systems.

FAQ

Q: What is KONET’s positioning in the digital asset infrastructure track?

KONET is a blockchain network for payment scenarios, focused on providing digital payment infrastructure through stablecoin settlement, an on-chain receipt system, and high-performance transaction processing capabilities. Its differentiation lies in scenario focus—building deep advantages in the vertical domain of payments, rather than pursuing a positioning as a general smart contract platform.

Q: Why are TPS and Gas fees no longer core indicators for public chain competition?

Because nearly all mainstream Layer 1s are continuously optimizing performance, and differences in technical indicators are being flattened. Once performance degrades from a “barrier” to a “threshold,” what determines a public chain’s long-term value is the richness of its application ecosystem, the authenticity of its user scale, and the efficiency of its asset circulation.

Q: What is an “ecosystem moat”? How is it constructed?

An ecosystem moat is formed through a positive feedback loop built by application count, user scale, developer activity, and asset circulation capability. More users bring more transactions and revenue, attracting more validators and developers, which in turn improves network security and functionality, ultimately attracting more users to join. This self-reinforcing mechanism forms the most difficult-to-replicate competitive moat.

Q: How important is cross-chain capability for digital asset infrastructure?

The cross-chain bridge market is expected to exceed $3.5 billion in 2026, and the annual asset transfer volume enabled by cross-chain interoperability infrastructure has already surpassed $1.3 trillion. In a competitive environment where asset circulation capability is becoming increasingly important, cross-chain capability directly determines ecosystem openness and scalability.

Q: What are the main trends in the digital asset infrastructure sector in 2026?

Three core trends: institutional capital accelerating into the market, regulatory frameworks gradually improving, and continuous optimization of payment and settlement infrastructure. Last week, the crypto industry recorded 16 funding events highly concentrated in the infrastructure sector, confirming the market’s long-term optimism about this track.