In 2025, the cryptocurrency market experienced significant structural changes. Although developer activity remained active, users and capital are accelerating their concentration into Bitcoin, Ethereum, BNB Chain, and protocols with stable yield capabilities, leading to substantial declines in the prices of many Layer 1 and Layer 2 tokens. OAK Research’s latest year-end report points out that this downturn is not merely a market sentiment issue but a result of long-standing tokenomics and value capture flaws becoming increasingly apparent.
The report shows that most mainstream Layer 1 blockchain tokens recorded annual losses in 2025, with some emerging projects experiencing particularly sharp declines. On-chain data further confirms the trend of user attrition: the total monthly active users of major public chains decreased by approximately 25% year-over-year. Among them, Solana saw the most significant decline, with a drop of over 60%; in contrast, BNB Chain’s user count nearly tripled, mainly benefiting from attracting existing users from other ecosystems.
The Layer 2 sector also exhibited clear differentiation. The TVL growth was most prominent in leading compliant US-based CEX ecosystem-related networks, while projects like Optimism and zkSync Era continued to see capital outflows, and Polygon and Arbitrum were not immune. The report notes that a few relatively stable projects rely more on token concentration and supply control rather than genuine fundamental improvements.
OAK Research attributes this round of decline to three core factors: first, over-reliance on high-inflation and continuously unlocking token models; second, the lack of a value capture mechanism that directly links network usage to token demand; third, institutional capital shows a clear preference for high-certainty assets like Bitcoin and Ethereum rather than small- and mid-cap infrastructure tokens.
Notably, the low prices have not completely dampened developer confidence. Data from Electric Capital shows that the number of full-time developers in Bitcoin, EVM, and Solana ecosystems continues to grow, indicating a decoupling of technological development from capital speculation. The report believes this phenomenon signifies that the market is maturing, and relying solely on “narratives” and technological ideals can no longer sustain token valuations.
Looking ahead to 2026, the report expects regulatory environments to become clearer, but general Layer 1 and Layer 2 tokens will still face pressure. Future capital is likely to continue focusing on protocols capable of generating real income and sustainable cash flow, while infrastructure tokens that cannot demonstrate economic value may further marginalize.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Bitcoin ETF Sees Daily Outflow of $16.03M While Ethereum and Solana ETFs Record Gains on April 27
Gate News message, according to the April 27 update, Bitcoin ETF recorded a daily net outflow of 209 BTC ($16.03 million), while maintaining a weekly net inflow of 9,987 BTC ($767.27 million). Ethereum ETF showed a daily net inflow of 24 ETH ($56,000) and a weekly net inflow of 41,013 ETH ($93.35 mi
GateNews32m ago
MicroStrategy increases its position by an additional 3,273 BTC: average price $77.9万, total cumulative holdings 81.83万 BTC
According to Strategy Inc.’s April 27 press release and disclosures in a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) on the same day, the company increased its purchases again last week (April 20 through April 26), buying 3,273 bitcoins (BTC). Cumulative total holdings reached 818,334 bitcoins, all funded with the $255 million raised through ATM (at-the-market) share issuances.
4/20-4/26 added 3,273 BTC at an average price of $77,906
This week’s trading window runs from April 20, 2026 to April 26, 2026. The company purchased 3,273 BTC with a total outlay of $255 million (including fees), and an average purchase price of $77,906 per coin. Compared with the spot bitcoin price during the same period, it fell within
ChainNewsAbmedia33m ago
Fidelity Digital Assets Q2 Report: Bitcoin Dominance Rising, On-Chain Data Shows Stabilization Signals
Gate News message, April 27 — Fidelity Digital Assets released its Q2 2026 Signal Report, highlighting stabilization signals across multiple on-chain metrics despite early second-quarter consolidation in the crypto market.
Bitcoin's market dominance continued to rise, with capital concentrating
GateNews45m ago
Nasdaq-Listed DDC Enterprise Plans to Increase Bitcoin Holdings to 5,000 BTC by Year-End 2026; Benchmark Initiates Coverage with 'Buy' Rating and 70% Upside
Gate News message, April 27 — Nasdaq-listed DDC Enterprise (ticker: DDC), an Asian food e-commerce platform, received its first coverage from Benchmark with a 'Buy' rating and a $3 price target, implying approximately 70% upside from its current stock price of $1.65. The firm outlined a "clear
GateNews53m ago
Major news week: U.S.-Japan interest rate decisions, earnings reports from the five largest tech giants, and employment data land one after another
This week, the Bank of Japan and the Federal Reserve’s interest-rate decision are set to be released soon, and among the seven major U.S. stock giants, five have published earnings reports, with U.S. employment data coming out at the same time. This article analyzes the transmission paths of macro events to the crypto market and their potential impact.
GateInstantTrends1h ago
Coinshares: $1.2B Crypto Inflow, Bitcoin Leads Fund Flows
Cryptocurrency investment products received $1.2 billion in inflows last week, marking the fourth consecutive positive week, according to a Coinshares report. Bitcoin surged above $79,000 before Asian market opening, though the move was short-lived, with BTC subsequently dropping to around $77,600.
CryptoFrontier1h ago
