2024 May Public Chain Research Report: Regulatory Adjustments and New Market Trends

Author: stella@footprint.network

Data Source: Public Chain Research Page

In May, the cryptocurrency market experienced significant regulatory and political developments. The U.S. Securities and Exchange Commission (SEC) approved the preliminary application for a spot Ethereum ETF, a move that boosted the market performance of Ethereum and its Layer 2 solutions. The Trump campaign team announced that they would accept cryptocurrency donations, indicating potential market implications for the upcoming U.S. presidential election. Solana is being adopted by more and more mainstream platforms, such as PayPal, and continues to maintain a strong growth trend. TON attracted a lot of attention due to Pantera Capital’s ‘largest investment to date’ and the continuous growth of on-chain TVL and on-chain activity.

This report is sourced from Footprint Analytics’ public chain research page. The page provides an easy-to-use dashboard that includes the most critical statistical data and indicators for understanding the public chain field, and is updated in real time.

Encryption Market Overview

In May 2024, the market dynamics were significantly impacted by major regulatory developments, with the Securities and Exchange Commission (SEC) in the United States approving the preliminary application for a spot Ethereum ETF. This milestone event not only helped Ethereum stand out in the broader cryptocurrency market but also marked a shift in regulatory support for cryptocurrencies.

In addition, the political situation has also had an impact on market sentiment. The Trump campaign team announced that they will accept cryptocurrency donations, suggesting that the upcoming US presidential election may have a profound impact on the cryptocurrency market, comparable to the impact of monetary policy adjustments by the Federal Reserve.

On the contrary, the ongoing resolution process of the Mt. Gox exchange bankruptcy case has exerted a certain degree of suppression on the Bitcoin price. The exchange, which has been bankrupt for ten years, announced last September that the creditor repayment process will begin in October 2024, sparking concerns in the market about the potential impact of a large-scale token sell-off.

Overview of Public Chains

As of the end of May, the total market capitalization of public chain cryptocurrencies has risen by 10.5% compared to April, reaching $19.9 trillion. Among them, Bitcoin, Ethereum, BNB Chain, and Solana lead the market share, accounting for 62.9%, 21.4%, 4.1%, and 3.6% respectively. It is worth noting that Ethereum’s market share has increased from 19.7% to 21.4%, while Solana has risen from 3.1% to 3.6%.

Data Source: Proportion of Market Cap of Public Chain Tokens

In May 2024, Bitcoin rebounded strongly from its low point at the end of April, rising from $60,653 at the beginning of the month to $67,606 at the end of the month, an increase of 11.5%. At the same time, Ethereum also showed a strong recovery trend, with its price rising from $3,011 to $3,778 during the same period, a surge of 25.5%.

Data Source: Bitcoin and Ethereum Price Trends

Driven by the broader cryptocurrency market trend, public chain cryptocurrencies have rebounded from their lackluster performance in April. In addition to Bitcoin and Ethereum, Solana’s market capitalization has risen by 34.5%, NEAR has risen by 19.0%, and Avalanche has risen by 14.8%.

Data Source: Token Prices and Market Cap on Public Chains

The price of TON has pumped by 23.0%, but its market capitalization has dropped by 14.6%. The reason is that on May 30th, The Open Network (TON) announced an update to the circulating supply of Toncoin on the data aggregator, excluding a portion held by Telegram, TON Foundation, and TON Believers Fund. This update immediately caused a drop in the market capitalization of Toncoin.

As of the end of May, the overall TVL of the public chains reached 87.2 billion US dollars, an increase of 14.7% compared to April. Among them, Ethereum, Tron, and BNB Chain are in a leading position. It is particularly noteworthy that the TVL of TON has surged by 106.4% in one month.

Data Source: Public Chain TVL Comparison

In May, Solana continued to maintain its upward momentum, mainly due to the sustained popularity of meme coins and a series of major developments. Among them, LayerZero incorporated Solana into its cross-chain network, achieving connectivity with seven chains: Ethereum, Avalanche, Polygon, Arbitrum, BNB Chain, Optimism, and Base, and plans to expand this network to over 70 blockchains. In addition, PayPal chose Solana to expand its stablecoin PayPal USD (PYUSD), marking the company’s first foray into a public chain outside the Ethereum ecosystem.

TON has also attracted a lot of attention. In early May, Pantera Capital, which manages over $5 billion in assets, announced its ‘largest investment to date’ in TON. In addition, Telegram’s game robot projects such as Tapswap and Hamster Kombat have been popular in the frenzy of Notcoin, attracting more users to join TON and driving the increase in on-chain activities.

The development of the main Layer 1 public chains in May 2024

Bitcoin

• BlackRock’s IBIT breaks record, becoming the fastest ETF to reach $20 billion in assets.
• Animoca Brands announced that it will enter the Bitcoin field through the OPAL Protocol.

Ethereum

• Bloomberg analysts predict that the demand for spot Ethereum ETF may reach 20% to 25% of spot Bitcoin ETF.
• Vitalik Buterin and other core Ethereum developers propose EIP-7702 proposal.

BNB Chain

• BNB Chain announced that it has conducted four hard forks on the opBNB testnet, and the gas cost on opBNB will be reduced by 10 times in the future.
• BNB Chain has launched the latest volume incentive plan.

NEAR

• NEAR: The number of shards on the mainnet has increased from 4 to 6, further improving network performance.
• NEAR announces the launch of a new R&D lab NEAR AI.

Sui

• Sui denies allegations related to manipulating token supply.
• The social login basic tool zkLogin of Sui has added multi-signature recovery function and supports logging in with Apple account.

Polygon

• PolygonLabs announced that it will use SP1 to create a pessimistic proof for AggLayer.

Core Chain

• The “Game Summer Grand Prix 2024” of Core DAO started on May 20th.

GalaChain

• An unknown hacker attacked Gala Games’ internal control account and minted 5 billion new GALA tokens on May 20th. The Gala Games team quickly discovered the attack and used their blacklist feature to isolate the attacker’s address.

Layer 2

In May, the SEC approved the preliminary application for a spot Ethereum ETF, boosting the performance of Ethereum Layer 2. Arbitrum leads the market with 44.8% market share and 19.6% TVL growth. Optimism closely follows with 22.2% market share and 13.1% TVL growth. Blast’s TVL grew by 22.3%, while Base grew by 27.2%.

Due to its DeFi activity Linea Surge, Linea’s TVL increased by 82.9%, attracting more DeFi enthusiasts and significantly increasing TVL on the network. Manta Pacific’s TVL increased by 17.4% due to the successful launch of the new product Manta CeDeFi, which provides rewards from CeFi and DeFi yields.

Data Source: Ethereum Layer 2 Overview

Development of major Layer 2 public chains in May 2024

Arbitrum

• Uniswap: Arbitrum is the first Layer 2 to surpass a total trading volume of $150 billion on DEX.
• Injective plans to launch its own Layer 3 network inEVM based on Arbitrum Orbit.

Optimism

• The Optimism team welcomes Layer 3 to join Superchain, build on the OP Stack, and share revenue with the Optimism Collective.

Starknet

• StarkWare announces the launch of ZKThreads, an extended framework based on ZK execution sharding.

Blast

• Blur launches Blast, offering Blast Points and 2 million GOLD rewards.

Taiko

• Taiko launched on Mainnet on May 27th.

Rootstock

• Rootstock founder: The programmability of Bitcoin may emerge within 12 months.

Merlin Chain

• Merlin Chain announces that all assets of Merlin’s Seal can be unstaked.

Block Chain Game

In May, a total of 1,525 games were active across multiple blockchain platforms, with BNB Chain, Polygon, and Ethereum accounting for 23.3%, 19.7%, and 15.7% of the market share, respectively, leading the way.

In May, Ronin, Polygon, and NEAR remained at the forefront among the 3.3 million daily active users, similar to the previous month. Ronin continued to dominate with a market share of about 29.0%. NEAR’s share increased from 12.1% at the beginning of May to 14.8% by the end of the month. Flow also showed a rising trend, with its share rising from 0.7% to 3.3%. Meanwhile, BNB Chain’s share declined from 8.0% to 5.9%.

Data Source: Daily Active Users of Public Chain Blockchain Games

On May 24th, the Arbitrum community initiated a vote for the 200 million ARB Game Catalyst Plan, which will end on June 8th, with the aim of strengthening the game ecosystem on the network. At the time of writing this report, the proposal has received majority support with a support rate of up to 80.6%. Meanwhile, Arbitrum is developing a Layer 3 game-specific chain ecosystem, and the multi-chain NFT game ecosystem Polychain Monsters announced the launch of a Layer 3 game-specific chain based on Arbitrum Orbit through Altlayer.

StarknetFoundation has granted 2 million STRK in funding to the on-chain metaverse game Realms.World, as part of its March announcement to enhance the Starknet gaming ecosystem strategy by distributing 50 million STRK tokens.

The classic football game “Captain Tsubasa”, developed by Mint Town Co., Ltd., a subsidiary of mobile game giant KLab Inc., and BLOCKSMITH&Co., officially landed on Oasys in May. Oasys is actively seeking further cooperation with Mint Town and other developers to integrate high-quality intellectual property (IP) into blockchain games.

For more data, see the May Blockchain Games Report: ‘May 2024 Blockchain Games Research Report: Market Cap Growth, Player Participation Changes, Mini Games Rise’.

Public Chain Financing Situation

In May, there were a total of 17 financing events in the public chain field, with a total financing amount of 89.7 million US dollars, a decrease of 14.3% from the previous month. However, 7 of the financing events did not disclose specific financing amounts. It is worth mentioning that Pantera Capital announced its investment in TON and referred to it as the “largest investment in history”. Previously, Pantera’s largest investment was 250 million US dollars, used to purchase Solana at a discounted price from the bankrupt FTX exchange.

May 2024 Public Chain Financing Event (data source: crypto-fundraising.info)

In the field of blockchain infrastructure, technological advancement continues to be the focus, attracting the attention of a large number of investors. One significant technological advancement is the integration of real-world assets (RWA) in encrypted applications. In May, Layer 1 blockchain E Money Network and Ethereum Layer 2 Plume Network both successfully obtained new rounds of financing, aiming to integrate their networks with RWA.

Humanity Protocol is undoubtedly another remarkable case, having successfully raised $30 million at a valuation of $1 billion. The company focuses on developing a blockchain-based identity system that utilizes palm scanning technology to verify individuals’ identities, aiming to provide authentication services for online identities in the era of prevalent deepfake AI technology. This financing event quickly propelled Humanity Protocol into the ranks of unicorn companies, achieving this milestone in less than a year.

Interestingly, it is becoming increasingly difficult to define Layer 2 as specifically Bitcoin or Ethereum’s Layer 2, as many Layer 2 solutions support scaling across multiple chains. For example, Lumoz, as a modular computation layer and ZK-RaaS platform, simplifies the use of ZK-Rollup and promotes its wider adoption. The platform supports multiple networks including Ethereum, Bitcoin, and BNB Chain.

According to the solution provider. With cutting-edge artificial intelligence technology, it provides the first no-code data analysis platform and unified data API in the crypto field, allowing users to quickly retrieve NFT, Game, and wallet address fund flow tracking data from more than 30 public chain ecosystems.