Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021

As we move closer to the year 2021, what will blockchain be like? What are our goals for that year and beyond?

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The “annual report” is a document that provides an overview of the company’s performance and financial data. The annual report was published in 2021.

The blockchain industry will formally use several chains in 2021.

There are now 86 public chains in total, up from only 11 at the start of the year, according to Footprint Analytics, a seven-fold rise.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Total Public Chains in 2021, according to Footprint Analytics

The hundreds of new DApps in DeFi, NFTs, GameFi, and SocialFi have rendered the network almost unusable on its own due to congestion and costs, while Ethereum maintained 96 percent market domination at the beginning of last year.

These new chains, which both compete with and complement the Ether ecosystem, have emerged as the major narrative heading into 2022 as Ethereum’s market share fell to 62 percent by year’s end.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Market Share of TVL by Chain – 2021 VS 2020 – Footprint Analytics

In this post, we will examine the many kinds of chains that have developed to improve the blockchain’s scalability.

Public Chain Development and Classification Overview

Three kinds of public chains exist:

  • By enhancing the performance of the public chain, Layer 1 technology competes with Ethereum. Public chains with the CEX brand, such as BSC, Cronos, and Heco, interoperability chains, such as Cosmos and Polkadot, as well as public chains, such as Solana, Avalanche, Terra, and Fantom, are examples of L1s.
  • Sidechains are Ethereum extensions that are compatible with the Ethereum Virtual Machine (EVM) and were primarily created to handle network congestion. Examples include Polygon, a blockchain network that grows and connects to Ether by offering a common architecture, and Ronin, which is particularly designed to combat NFT transactions.
  • By processing partial transactions (referred to as rollups) off-chain, layer 2 solutions enhance Ethereum. Optimistic rollups and ZK rollups are the two primary varieties of rollups. Read this Footprint in-depth analysis of L2 for additional information.

Ecosystems of public chains

The total TVL of all public chains reached its high in 2021 at $293 billion, a sharp 10x rise from 2020.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Total TVL by Footprint Analytics in 2021

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The numerous L1 public chains among them have chosen diverse approaches to develop their ecosystem and oust Ethereum from the market.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Market share for various public chains, according to Footprint Analytics

There are now close to 1,000 DeFi projects on each public chain. In addition to Ethereum, the top 10 public chains now include BSC, Polygon, Avalanche, Solana, Fantom, Terra, Arbitrum, and Cronos.

Projects for DEXs, yield, loans, assets, staking, minting, and other things are also part of any public chain ecosystem. However, DEX, lending, and yield currently make up the majority of their TVL.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Footprint Analytics – The Growing Trend of DeFi ProjectsFootprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Footprint Analytics – Top 10 Public Chain Growing TrendFootprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Footprint Analytics – Top10 Public Chain’s TVL Distribution

In 2021, NFTs and GameFi also become popular trends, and several public chains were developed particularly to cater to them. For instance, Ronin has risen to become the second-largest public chain for NFT trading.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021NFT Transaction Amount of Various Public Chains, according to Footprint Analytics

Better performance and cheaper transaction costs are also necessary for GameFi, which demands higher returns, playability, and fluidity. The top three public chains in GameFi in terms of monthly active users are Hive, WAX, and BSC.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Monthly GameFi Users of Different Public Chains, According to Footprint Analytics

 

In 2021, the top public chains

Check out the ten In 2021, the top public chains, here.

After receiving various rounds of investment towards the end of the year, Terra, a public chain based on a stablecoin protocol, overtook BSC to take second place among all public chains.

Unquestionably, one of the most promising public chains for 2021 is Avalanche. Its TVL increased the most in 2021 and is the fourth-highest among all public chains.

Solana, a formidable opponent of Avalanche, is presently rated sixth in TVL.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Top 5 Public Chains TVL in terms of Growth Rate for 2021, according to Footprint Analytics

The Explosive Rise of Chain Bridges

Bridge-building between these many solutions and initiatives has become essential since the blockchain world has now been split into several chains.

In October 2021, work on these projects grew quickly. The TVL of cross-chain bridge projects topped $10 billion as of December 31.

The majority of cross-chain bridge protocols are L2 extended cross-chain bridges built on Ethernet with the aim of connecting to Ethereum.

Footprint Analytics: Public Chain Development in 2021— From Ideal to Reality | Annual Report 2021Cross-chain bridges’ TVL according to Footprint Analytics

In addition to the many cross-link bridges, consumers and developers like cross-link bridge aggregators like Chainswap and FundMovr. Users may immediately swap between various assets during cross-chaining with the use of cross-chain bridge aggregators. Interoperability across chains, which enables developers to construct their use cases more effectively, has also emerged as a key objective.

Summary

The blockchain now encompasses much more than simply Bitcoin and Ethereum due to broad acceptance and a surge in new users.

Numerous public chains are available because to their very modest development costs, which make it possible to address several important Web3.0 issues. However, increased dispersion also poses additional difficulties for consumers and developers, necessitating the need for interoperability solutions.

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Author and Date: [email protected] on January 12, 2022

Our Year in Review series includes this article.

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