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Easy-to-understand analyses and guides that cover both core technologies and external influences, using relatable analogies and side-by-side comparisons to help you navigate crypto investing confidently.

Comparison of Major Layer-1 Blockchain Ecosystems

Explore the key differences and unique features of major Layer-1 blockchain ecosystems by market cap.

Specialized network, highly secure, decentralized, and widely recognized. Considered “digital gold.” Mainly used as a store of value and for peer-to-peer transactions.

Architecture

Proof-of-work consensus type, with monolithic architecture which handles the execution and settlement of transactions as well as the maintenance of consensus within a single layer. Highly secure and decentralized due to the extensive network of miners and nodes. Limited by block size and block time, leading to slower transactions and higher fees during congestion.

Tokenomics highlights

Bitcoin has a fixed supply of 21 million BTC, creating deflationary effects. New bitcoins are generated through mining, with rewards halving approximately every four years. Initially, bitcoins were distributed as mining rewards.

Governance model

Off-Chain Governance via Bitcoin Improvement Proposal (BIP) Process with Miner Consensus

Challenges

High transaction fees and scalability issues with slow transaction times as well as environmental cost due to proof-of-work

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Digital platform that introduces smart contracts, which are like programs with specific procedures that, once deployed, no one can change. Acts as an infrastructure for most decentralized applications with a large developer community.

Architecture

Proof-of-work consensus in the beginning, Proof-of-stake since the Merge in 9/2022. Ethereum uses modular architecture which separate into distinct, specialized layers. Strong security and high level of decentralization with a large number of nodes and active developers. Scalability issues are solved through rollup chains which help lower fees significantly.

Tokenomics highlights

Ethereum does not have a fixed supply cap and has lower issuance than Bitcoin. Its supply can become deflationary when network activity increases through the burning mechanism. A significant amount of ETH is staked, and unlike Bitcoin miners, ETH stakers don’t need to sell to cover operational costs. Consequently, many ETH holders are less likely to sell, reducing the available supply. ETH was initially distributed through an Initial Coin Offering (ICO) in 2014.

Governance model

A hybrid approach that incorporates both off-chain and on-chain elements, with off-chain governance including community discussions and Ethereum Improvement Proposals (EIPs), while on-chain governance involves stakeholder voting on the blockchain. Various stakeholders, from Ether holders to protocol developers, play roles in this process. EIPs are proposed, reviewed, and iterated upon before being implemented through network upgrades.

Challenges

Scalability of transactions causing high gas fees, ranging from a few dollars to over $100 during periods of high network congestion. Layer 2 solutions reduce fees by offloading transactions from the main chain, typically fractions of a cent, but cause fragmentation of liquidity and user experience.

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Digital platform focused on extremely fast transactions and low fees, supported by robust architecture for handling thousands of transactions per second. Supports smart contracts and DApps with high throughput and low latency. High security with innovative mechanisms, but newer and less battle-tested and less decentralized than Bitcoin and Ethereum, with fewer nodes but still growing.

Architecture

Solana uses Proof of History as a tool in its Proof of Stake consensus. Proof of History avoids the need for every node to agree on each transaction’s order, leading to significantly faster transaction processing. Solana’s monolithic architecture handles the execution and settlement of transactions as well as the maintenance of consensus within a single layer.

Tokenomics highlights

Solana uses a unique inflation model to reward network validators and tokenholders, which provides supply predictability and supports long term economic stability. Transaction fees are participant-to-participant transfers that compensate network participants for including and executing a proposed transaction. A portion of each transaction fee is also partially burned to protect against forking and support long-term economic stability. Tokens are distributed through public allocation (sale or airdrop), ecosystem/treasury, investors, and the team. No capped max supply.

Governance model

Off-Chain Governance. The community can propose changes, but core developers and validators decide on their implementation. The Solana Foundation supports the ecosystem’s development and provides funding and strategic guidance. On-chain voting is possible through the feature program, however lacks functionality and visibility and has barely been used in practice.

Challenges

Solana has faced frequent network outages due to congestion from high transaction volumes. The high cost and technical requirements for running a validator node can lead to centralization

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Originally developed by Telegram, which ceased its direct involvement due to regulatory challenges, The Open Network (TON) has since been continued by the global developer community under the same name. It offers high transaction speeds, a strong focus on usability, and integration with existing platforms like Telegram. Leveraging Telegram’s vast user base for mass adoption, it is particularly well-known for its gaming ecosystem.

Architecture

Proof-of-stake consensus. Multi-blockchain system with a masterchain and multiple workchains facilitating parallel transaction processing across multiple chains. Asynchronous message delivery allows transactions to be processed independently and in parallel to improve scalability. Supports smart contracts with the ability to integrate seamlessly with messaging apps like Telegram. TON dapps are deployed directly in Telegram as per its “open platform” philosophy, creating a smooth UX with web3 features abstracted away.

Tokenomics highlights

TON’s tokenomics features an initial supply of 5 billion tokens, increasing by approximately 0.6% per year through staking rewards. The $TON token can be purchased via credit card on Telegram Wallet and used for digital goods and advertisements within Telegram.
 

Governance model

TON uses an on-chain governance model where decisions are facilitated by specialized smart contracts called Fate Channels and token-holder voting. The community can propose changes and vote on them, with token holders having a say in the network’s future direction.

Challenges

Past issues with the SEC create ongoing concerns about regulatory compliance and potential future legal challenges. The TON ecosystem currently has a relatively small number of developers compared to other ecosystems, facing significant challenge in boosting developer engagement due to the complexities of its programming languages, FunC and Fift.

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Aiming to create an “Internet of Blockchains,” Cosmos allows developers to set up their own blockchain easily. The blockchains in Cosmos ecosystem are interoperable and interconnected.

Architecture

Cosmos’s architecture underscores modular blockchains, separating functions into distinct, specialized layers, including the Tendermint Core consensus engine, the Cosmos SDK, and the Inter-blockchain Communication Protocol (IBC). This structure supports strong security through the Tendermint consensus and staking mechanisms, ensuring robust protection. The modular architecture is highly scalable, allowing for the creation of multiple interoperable blockchains with the Cosmos SDK. The IBC enables different blockchains within the Cosmos ecosystem to communicate and transfer data or tokens seamlessly. The Cosmos Hub acts as a central connector in a hub-and-spoke model, linking various independent blockchains, known as zones. Additionally, it supports smart contracts on connected blockchains. Most of Cosmos ecosystem uses Proof-of-stake consensus, although some permissioned blockchains in the Cosmos ecosystem that leverage Proof-of-Authority (PoA).

Tokenomics highlights

The Cosmos ecosystem features a fixed supply cap with an inflationary model. The inflation rate varies between 7% and 20% annually, depending on the amount of ATOM staked. Initial distribution occurred through an ICO in 2017, with ongoing issuance provided through staking rewards.

Governance model

The Cosmos ecosystem employs an on-chain governance model with weighted voting based on the amount of staked ATOM tokens. The Inter-Blockchain Communication (IBC) protocol facilitates governance across multiple interconnected blockchains (zones), each of which can maintain its own unique governance structure.

Challenges

In optimizing for sovereignty and flexibility, each zone in Cosmos can have its own governance, token economics, and operational rules. As a result, the Cosmos network’s main token, ATOM, doesn’t directly benefit from the increased activity or value generated in other zones. Because each zone on Cosmos uses its own tokens for validation and gas fees, these tokens may not be easily exchangeable or interchangeable with ATOM or tokens from other zones. This lack of fungibility limits the liquidity and ease of use of tokens across the entire Cosmos ecosystem.

Additionally, concerns about governance, transparency, and mismanagement within the Interchain Foundation (ICF) have eroded community trust, leading to calls for leadership changes and a comprehensive audit. The disconnect between developers and users has further strained the ecosystem, with a growing sentiment that Cosmos is losing its lead in the blockchain race to platforms like Ethereum and Celestia. 

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Comparison of Notable Emerging Ecosystems

Discover the distinctive attributes and innovations of notable emerging blockchain ecosystems to stay ahead in the evolving world of blockchain technology.

High-performance blockchain for scalable and low-latency dApps aiming to provide a scalable and developer-friendly platform for efficient dApp deployment

Architecture

Sui’s architecture features an object-centric model, Move programming language, and parallel transaction execution which contrasting sharply with the traditional sequential method.  Additionally, Sui employs a unique consensus mechanism combining Narwhal, a Directed Acyclic Graph (DAG)-based mempool, and Bullshark, a Byzantine Fault Tolerant (BFT) protocol, ensuring robust security and efficiency by organizing transactions in a graph structure to manage and confirm them securely. Sui is incompatible with Ethereum Virtual Machine (EVM).

Tokenomics highlights

Fixed total supply of 10 billion SUI tokens. A significant portion is allocated to the community, which include research and development and validator subsidies. Token is used for transaction fees, securing the network through staking, and participating in governance.

Governance model

On-chain governance is facilitated through Movernance. SUI token holders can actively participate by staking their tokens to a validator.

Challenges

While Sui aims to provide high scalability, actual performance under heavy usage remains to be fully proven. Sui as an ecosystem also faces challenges in broader adoption, particularly due to the learning curve of its unique Move language.

 

 

 

A decentralized exchange (DEX) protocol built on the Cosmos SDK, aimed at creating fully decentralized financial markets. It supports a variety of financial products, such as spot trading, derivatives, and synthetic assets, and emphasizes cross-chain compatibility along with fast, low-cost transactions.

Architecture

Injective’s architecture is built on the Cosmos SDK, benefiting from a modular and interoperable framework, as well as Tendermint consensus. It utilizes an order book model instead of an Automated Market Maker (AMM), allowing for more complex trading strategies and a familiar trading experience. The platform supports cross-chain trading via the Inter-Blockchain Communication (IBC) protocol, ensuring high throughput and low latency.

Tokenomics highlights

Fixed total supply of 100 million INJ tokens. Majority of tokens are allocated to long-term development and growth of the ecosystem. Token is used for transaction fees, governance, securing the network through staking, and various protocol functions like trading and market creation. A portion of transaction fees is burned, reducing the total supply over time and potentially increasing the value of remaining tokens.

Governance model

Operates under a DAO model, enabling decentralized governance through INJ token holders. Participants may receive rewards for their involvement in governance activities.

Challenges

Operating in the financial and derivatives space brings significant regulatory challenges that can impact growth and operations. Plus, competing with well-established DeFi platforms and attracting sufficient liquidity and user base is a constant challenge for Injective.

 

A smart-contract platform built on the Lachesis – a Asynchronous Byzantine Fault Tolerance (aBFT) consensus protocol. Lachesis enables Fantom to operate faster and more cost-effectively than previous technologies while maintaining robust security. Previously FTM,

Sonic is an EVM Layer-1 blockchain platform evolved from Fantom, focusing on providing high-performance and scalability for decentralized applications. The platform supports the native token $S, which is used for transaction fees, staking, governance, and running validators. After the new network is launched, users holding the old FTM token will be able to convert it to $S at a 1:1 ratio.

Architecture

Lachesis offers instant transaction finality, is leaderless to enhance security, and uses aBFT to maintain consensus even in the presence of malicious nodes, solving many scalability issues of existing blockchains. Fantom is fully compatible with the Ethereum Virtual Machine (EVM). Modular architecture allowing different components to be upgraded or replaced without disrupting the entire network. 

Tokenomics highlights

Maximum supply of 3.175 billion FTM tokens. Majority of tokens are allocated to private sale and the foundation. Token is used for transaction fees, securing the network through staking, securing the network through Lachesis consensus, and governance.

Governance model

On-chain governance with weighted voting power proportional to the amount of staked FTM tokens.

Challenges

Fantom has relatively few validator nodes compared to  other mature public chains. The decentralization is not high enough to attract DeFi protocols, which affects TVL.

 

A modular blockchain network designed to enable scalable and secure decentralized applications. It separates consensus and data availability from the execution of transactions, allowing developers to deploy customized execution environments while leveraging Celestia’s consensus and data availability layers.

Architecture

Celestia separates consensus and data availability from transaction execution, allowing developers to deploy customized execution environments while relying on Celestia for consensus and data availability, allowing the network to handle a large number of transactions and data. It uses data availability sampling where nodes are not required to download the entire blockchain. Celestia’s architecture allows for different consensus algorithms to be plugged in, providing flexibility and adaptability to various use cases. As a Cosmos chain, Celestia uses Tendermint consensus.

Tokenomics highlights

The maximum supply is set at 1 billion TIA tokens, and the circulating supply will gradually increase over time. Allocated towards development, ecosystem incentives, the team, and early supporters. Token is used to pay for data availability, as a gas token and currency for new rollups, simplifying blockchain deployment, securing the network through staking, and governance.

Governance model

A hybrid model of on-chain and off-chain governance. TIA holders (not just stakers) can propose and vote on governance proposals.

Challenges

A specialized DA layer without an Execution layer doesn’t serve much purpose. Unlike other blockchain networks, Celestia will consequently rely on other Execution chains to kickstart user activity. Because Celestia doesn’t perform state execution , unlike most chains, its token’s utility as a liquidity source in DeFi and other areas may be limited.

 

 

A sector-specific Layer 1 blockchain focused on optimizing the trading infrastructure for decentralized exchanges (DEXs) and DeFi applications. Built on the Cosmos SDK, Sei aims to provide high throughput, low-latency, and secure trading experiences by offering a specialized environment tailored for trading applications.

Architecture

Sei is built using the Cosmos SDK, enabling interoperability and modularity, and specifically designed to optimize the infrastructure for decentralized exchanges (DEXs) and DeFi applications. Sei includes a specialized order execution layer that provides high-performance and deterministic order execution, tailored for trading applications and shared liquidity across different DEXs and DeFi platforms built on its network. Sei implements Optimistic Parallelization, allowing for parallel transaction processing while maintaining sequential processing when transaction order is critical. As a Cosmos chain, Sei uses Tendermint consensus.

Tokenomics highlights

Fixed total supply of 1 billion SEI tokens. Tokens are allocated to community and ecosystem incentives, the development team, advisors, and investors. Token is used for transaction and trading fees, as native asset liquidity or collateral to applications built on the Sei blockchain.securing the network through staking, and governance.

Governance model

On-chain governance where members vote with their staked Sei. One staked Sei equals one vote. If a user fails to specify a vote, their vote defaults to the validator they are staked to. Validators vote with their entire stake unless specified by delegators.

Challenges

The on-chain ecosystem, overall applications, and TVL are in the early stages, lacking standout DeFi applications. Managing fast finality in various conditions and with changing number of nodes as the network matures will be a future challenge for Sei. Handling transactions in parallel presents inherent complexities due to the nature of blockchains, especially in situations where multiple nodes share states which can lead to disparities in parallel processing.

 

A layer 1 blockchain that combines cryptography and artificial intelligence, directing computing resources involved in the mining process towards machine learning advancements.

Architecture

Qubic’s architecture features Useful Proof-of-Work (UPoW), redirecting computational power to training AI models rather than solving energy-intensive cryptographic puzzles. Its hardware-based execution of C++ smart contracts eliminates reliance on slower virtual machines, enabling execution in seconds with unmatched speed and efficiency.

Tokenomics highlights

Qubic’s native token (QUs) is used as network’s computational energy for smart contract execution and other services. The token is also used for staking, governance, and as rewards for validators and miners. Transfers within the network are feeless, with QUs functioning as energy rather than currency—permanently burned upon use to offset inflationary minting. The token supply is capped at 200 trillion, with an emission schedule designed to support deflation.

Governance model

Qubic operates on an on-chain governance model, Qubic’s Quorum, which requires at least 451 votes from network validators (Computors) to pass any decision on the network. Each Computor has an equal vote. This mechanism encourages active participation from Computors to maintain a decentralized and secure network.

Challenges

The crypto x AI sector is in its early stages and not without significant risks. The lack of established standards for decentralized AI hampers interoperability and broad adoption. While decentralized AI platforms may offer cost advantages, high migration costs from centralized systems could deter adoption. Furthermore, evolving regulations around data sharing, AI use, and tokenomics add complexity and potential hurdles for the project.

 

 

 

A decentralized, open-source blockchain designed to create a marketplace where machine learning models contribute, share intelligence, and are rewarded based on their utility.

Architecture

Bittensor is a decentralized AI marketplace where  models exchange knowledge and are evaluated by intelligence and utility. It uses proof-of-intelligence (PoI) consensus, with participants contributing computational power to earn TAO rewards. The ecosystem consists of unique subnets that tackle a wide array of computational and specialized tasks. Built on Subtensor, it records activity and distributes rewards every 12 seconds via the Yuma Consensus, ensuring fairness and preventing collusion.

Tokenomics Highlights

The TAO token incentivizes participants to contribute computational resources and intelligence. TAO is created via mining and validation, with rewards distributed equally between miners. TAO has a limited supply model. The tokenomics are structured to reward high-quality machine learning contributions while maintaining the network’s security.

Governance Model

Bittensor’s governance follows a bicameral system: the Triumvirate (three Opentensor Foundation members proposing updates) and the Senate (the top 12 validators by delegated TAO). Proposals require Senate majority approval and finalization by a Triumvirate member. Governance is expected to decentralize over time, expanding community control.

Challenges

The scalability and efficiency of decentralized AI frameworks like Bittensor remain unproven under large-scale use. Without seamless performance, centralized AI solutions from established companies could overshadow Bittensor, limiting its adoption.

An open-source layer-1 blockchain that adheres to the same principles embedded in Bitcoin but with fast transactions and high scalability. 

Architecture

Kaspa uses the GHOSTDAG protocol, allowing parallel block creation instead of a linear sequence commonly seen in blockchain. This enhances transaction speed and scalability while maintaining security and decentralization in a proof-of-work (PoW) system. Meanwhile, kHeavyHash is Kaspa’s custom hashing algorithm, optimized for energy efficiency and hardware compatibility. While less computationally intensive, it maintains the security of traditional PoW systems.

Tokenomics highlights

With no pre-mine, pre-sales, or coin allocations, Kaspa is fully decentralized, open-source, and community-managed. Its maximum supply is 28.7 billion coins, with a halving emission schedule occurring yearly through smooth monthly reductions. KAS is used for transaction fees and miner rewards for securing the network.

Governance model

Currently, Kaspa operates without an official on-chain governance system, relying on open-source development and community contributions. 

Challenges

With fast proof-of-stake systems like Solana and Avalanche competing for blockchain scalability and efficiency, the pressure is mounting. As a relatively new blockchain that is not EVM-compatible, it must attract developers from established ecosystems to build applications. Future upgrades, including smart contract integration, must be executed flawlessly to meet expectations.

NEAR Protocol is a chain-abstraction Layer-1 blockchain for smart contracts and dApp development, designed to optimize accessibility for both developers and users while leveraging its AI roots and scalable infrastructure to drive AI advancements.

Architecture

NEAR employs Proof-of-Stake (PoS) consensus. NEAR’s Nightshade sharding enables parallel transaction processing for scalability and low latency. Its Doomslug consensus ensures single-block finality in under two seconds. Built with WASM-compatible smart contracts, it supports dApps in Rust and AssemblyScript, making building on NEAR accessible to developers, while its human-readable addresses simplifies user experience.

Tokenomics highlights

NEAR’s native token, NEAR, is used for transactions fees, running validator nodes by staking NEAR, and governance. Launched with 1 billion tokens at genesis, NEAR has a fixed inflation rate of 5% per year.

Governance model

The NEAR ecosystem is adopting a stake-based governance model, where token holders can delegate their voting power to representatives, known as delegates, to make informed decisions on their behalf. The House of Stake introduces “Endorsed Delegates” to promote qualified representatives.

Challenges

NEAR faces growing competition from established ecosystems like Ethereum and Solana for dApp developers. While solutions like the Rainbow Bridge enhance Ethereum compatibility, broader interoperability is still evolving. Increasing adoption and interoperability will be key to its long-term success.

 

 

A Decentralized Storage Network (DSN) that connects people who have extra available computer disk space with those who need more computer storage. Designed to provide scalable, cost-effective, and permanent data storage, it introduces a unique economic model that ensures data remains available indefinitely with a one-time fee.

Architecture

Arweave operates on a novel blockchain-like structure called Blockweave. Unlike traditional blockchains, Arweave’s blockweave connects each block to the next and two prior blocks, including a “recall block” from its history. This design supports its Proof-of-Access (PoA) consensus mechanism, requiring miners to access older blocks to validate new ones, encouraging long-term data storage.

Tokenomics highlights

Arweave’s AR token is used for data storage fee and for incentivizing miners to provide storage and transaction validation. Most fees go into a storage endowment, paying miners over time to stabilize AR’s value and sustain the network. With a fixed supply of 66 million, AR is deflationary as storage demand grows.

Governance model

Arweave doesn’t have an onchain governance model. Instead, the protocol lets anyone suggest improvements and earn rewards if the community adopts them. Developers create updates, offer them with new tokens, and users decide which changes are useful. This process keeps Arweave improving while ensuring fair rewards and minimal token inflation.

Challenges

Arweave’s storage model relies on a one-time payment system and the long-term value of its AR token to fund perpetual data storage. If AR loses value, miner incentives weaken, leading to reduced data replication and potential data loss, therefore undermining Arweave’s promise of permanent storage.

A privacy-focused blockchain designed based on Bitcoin. It leverages advanced cryptographic techniques to enable shielded transactions, ensuring user confidentiality while maintaining a transparent and auditable blockchain.

Architecture

Zcash is built on the Bitcoin codebase, incorporating the zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) cryptographic system. This allows transactions to be verified without revealing sender, receiver, or transaction amount. Zcash supports two types of addresses: Transparent (t-addresses), which is publicly visible, and Shielded (z-addresses) – private transactions that obscure sender, receiver, and amount. To maintain network security, Zcash uses a Proof-of-Work (PoW) consensus mechanism.

Tokenomics highlights

Zcash has a fixed supply of 21 million ZEC, mirroring Bitcoin’s model, with block rewards halving every four years. 80% of rewards go to miners, 8% to the Zcash Community Grants Committee, and 12% to a “lockbox” awaiting a community-defined disbursement mechanism. Instead of an ICO, Zcash implemented a “Founders Reward,” allocating 10% of mining rewards to founders, investors, and advisors for its first four years. ZEC is used for transaction fees and may play a role in future governance.

Governance model

Zcash governance has evolved from being led by the Electric Coin Company (ECC) – ZCash’s developers, with community input to a more decentralized model. Initially, ECC made key decisions, but governance now includes diverse stakeholders. A couple on-chain governance models have been proposed as next steps.

Challenges

Privacy-focused cryptocurrencies often face regulatory scrutiny and potential restrictions. The major criticism of Zcash is the potential of being used as a secure haven for illegal transactions by cybercriminals. ZCash also face significant competition from other privacy coins, such as Monero.

 

 

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