Messari: L1 Q1 2023 Report, Market Rebound Not Accompanied by Network Usage Recovery

Messari researcher Peter Horton has written the L1 Q1 2023 report, covering 14 L1s and 21 metrics, comparing the financial, network, and ecosystem activities of smart contract platforms.

Some key points: 1) The market rebound did not accompany the recovery of network usage; 2) Stacks performed well on multiple indicators; 3) Ethereum is still the king; 4) USDT’s market share exceeds USDC and BUSD, which is beneficial to Tron DAO.

$STX is the most popular token in Q1 2023 (an increase of 340% compared to the previous quarter), thanks to the popularity of BITC Ordinals. On average, important L1s increased by 83% QoQ, but still decreased by 56% YoY. Ethereum’s Q1 2023 revenue was $457 million, almost 2.8 times the total of other important L1s. Hedera had the fastest QoQ revenue growth rate of 489%, thanks to an increase in the usage of its consensus service.

Tron DAO has the lowest P/E ratio of 16 times, beating Ethereum’s 118 times. WAX Blockchain is the only network outside the top 20 in market capitalization that falls into the first half of P/E ratio, ranking third with a P/E ratio of 201 at the end of this quarter. Inflationary pressure comes from the transfer of wealth from holders to stakers through PoS reward issuance. BNB Chain’s $BNB is the token with the most severe deflation, at -5.4%, surpassing $ETH. Binance’s buyback and burn account for most of the deflationary pressure.

Inflationary pressure may also come from the unlocking of genesis supplies. The genesis token distribution of most important L1s has been fully unlocked. Note that this metric does not include any staking reward portion of tokens with capped initial supplies. Lower inflation leads to lower staking rates because holders are not penalized for not staking. Liquidity staking can make staked tokens participate in the ecosystem, but LSTs typically introduce poorer liquidity, smart contract risks, and different tax implications. At the end of Q1 2023, Ethereum had the most staked value of $32.6 billion. Stacks (403%) and Solana (125%) lead in QoQ growth, and both growth rates are slightly higher than their market value growth, indicating net token growth.


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