The rise of Layer 1 (L1) blockchains has been one of the most compelling narratives in the cryptocurrency space since Ethereum’s inception. Today, more than half of the top 20 cryptocurrencies by market cap are native tokens of L1 blockchains. The idea of "alternative Layer 1s" — or "alt L1s" — became a dominant theme during the 2017 ICO boom and again during the 2021 DeFi and NFT surge, as users sought faster, cheaper alternatives to Ethereum amid soaring gas fees and network congestion.
Yet years after the alt L1 hype peaked, Ethereum remains the undisputed leader in the smart contract blockchain ecosystem. Many competing chains appear deserted, with stagnant or declining user activity. Meanwhile, new L1s like Aptos and Sui have launched with valuations exceeding $12 billion combined, and more high-profile projects are on the horizon.
So, can any Layer 1 blockchain truly surpass Ethereum?
👉 Discover how emerging blockchains are challenging Ethereum’s dominance.
The Evolution of Layer 1 Blockchains
To answer this question, it's essential to understand the historical context. We define L1 blockchains here as broad, permissionless smart contract platforms — often dubbed “Ethereum killers.”
The story begins with Bitcoin’s limitations. Designed as a decentralized digital cash system, Bitcoin lacks the flexibility to support complex applications due to its restrictive scripting language and community resistance to feature expansion. This gap paved the way for Ethereum, the first widely adopted blockchain with a Turing-complete programming language, opening up vast possibilities for decentralized applications (dApps).
Ethereum prioritized decentralization over scalability — a core philosophical stance shared with Bitcoin. As adoption surged during events like the 2017 ICO frenzy and the 2020–2021 DeFi Summer, the network quickly hit throughput limits. Transactions backed up, gas fees spiked — sometimes exceeding $150 for a simple transfer — and user experience suffered.
Rather than risk centralization by increasing block size or altering consensus rules, developers opted for long-term scaling solutions. This bottleneck fueled interest in alternative L1s promising higher speed and lower costs. Projects like EOS, Tezos, and Cardano raised hundreds of millions during earlier cycles, echoing a pattern seen again in 2021.
Current Market Landscape: Where Does Ethereum Stand?
Despite hundreds of competing L1s launched over the past decade, Ethereum maintains its leadership across key metrics — but not uniformly.
Users: Cheaper Chains Win on Volume
User adoption is often considered a primary driver of network value, following Metcalfe’s Law — that network value scales with the square of connected users.
While accurate user counts are difficult due to pseudonymity and easy address creation, active addresses serve as a useful proxy. By this metric, Ethereum actually lags behind. Blockchains like Tron, BNB Chain, and Polygon report significantly higher daily active addresses.
In fact, several L1s have already surpassed Ethereum in user numbers. Yet their market caps remain far below. Why? Because raw user count isn’t the only factor shaping valuation.
Developers: The Engine of Innovation
Developers are a leading indicator of future ecosystem health. They build dApps, improve protocols, and expand use cases.
According to Electric Capital’s Developer Report, Ethereum leads in total active developers. While Polkadot, Cosmos, and Solana also boast strong developer communities — especially notable given their custom programming languages — Ethereum’s head start and vast tooling give it a significant edge.
Even newer entrants like Aptos and Sui show promising developer traction shortly after launch, thanks to innovations like the Move programming language designed for safer smart contracts.
👉 Explore how developer activity shapes blockchain success.
Liquidity: Ethereum’s Strongest Moat
Where Ethereum truly dominates is liquidity — measured by Total Value Locked (TVL), decentralized exchange (DEX) volume, and number of trading pairs.
Since mid-2022, Ethereum has consistently held around 60% of the total TVL across all L1s — a position that stabilized after the Terra collapse. Major stablecoins like USDC issue natively on Ethereum, and platforms like Coinbase and Fireblocks prioritize integration with it, reinforcing capital inflows.
This suggests that while other chains may win on users or speed, market participants still view Ethereum as the most secure and reliable store of value and execution layer.
Key Factors That Determine L1 Success
Beyond surface metrics, several deeper dynamics influence which blockchains thrive:
Decentralization: The Foundation of Trust
True decentralization enhances censorship resistance, security, and long-term resilience. Key indicators include:
- Node count and distribution: Geographically and organizationally diverse nodes reduce single points of failure.
- Token distribution: High concentration risks governance manipulation.
- Client diversity: Multiple independent software clients protect against bugs or attacks.
- Nakamoto Coefficient: Measures how many entities control 51% of the network; higher is better.
- Governance model: On-chain vs. off-chain governance affects participation and centralization risks.
- Cultural ethos: Strong community values help resist centralization pressures over time.
Ethereum scores well across most of these dimensions — particularly after its shift to Proof-of-Stake and ongoing efforts to improve client diversity.
Network Effects: The Flywheel of Growth
Network effects create self-reinforcing cycles:
- More users attract more developers.
- More developers build better applications.
- Better apps draw in more users — and capital follows.
Programming languages like Solidity benefit from massive communities, extensive documentation, reusable libraries, and abundant audit expertise — lowering barriers to entry.
Financial network effects are equally powerful: liquidity begets liquidity. New financial primitives (e.g., novel derivatives or yield mechanisms) are more likely to debut on Ethereum due to its deep markets.
Lindy Effect: Survival Equals Longevity
The Lindy Effect posits that the longer a technology survives, the longer it’s expected to last. Blockchains that endure market crashes, hacks, regulatory scrutiny, and technical challenges — like Ethereum has over multiple cycles — gain credibility and trust.
This historical resilience gives mature networks an advantage over newcomers, regardless of technical superiority.
Path Dependence: History Matters
Path dependence explains how early decisions lock in long-term outcomes. Ethereum’s initial Proof-of-Work phase enabled broad token distribution — something hard to replicate today.
Similarly, Solana’s early association with FTX helped propel it into mainstream awareness despite recent setbacks. Once momentum builds along a certain trajectory, shifting course becomes increasingly difficult.
Differentiation: Standing Out in a Crowded Space
Successful alt L1s often differentiate through:
- Higher throughput (e.g., Solana’s 50k+ TPS claims)
- Lower fees
- Unique consensus models (like Avalanche’s subnet architecture)
- Specialized programming languages (Move on Aptos/Sui)
- Vertical focus (e.g., gaming or identity)
Solana stands out with its monolithic high-speed design aimed at maximizing composability and user experience.
Monetary Policy: Incentives Shape Behavior
A clear issuance, distribution, and potential burn mechanism influences scarcity and long-term value accrual. Well-designed monetary policies align incentives between validators, developers, and users — promoting stability and sustainable growth.
The Rise of Layer 2s: Redefining the Competition
Crucially, scaling is no longer just about competing L1s. Since rollups became Ethereum’s official scaling roadmap in late 2020, solutions like Arbitrum, Optimism, and Base have captured massive user adoption and TVL — often surpassing top L1s.
ZK-Rollups are poised to accelerate this trend. When considering these L2s as part of the broader Ethereum ecosystem, the bar for “surpassing Ethereum” rises dramatically.
👉 See how Layer 2 solutions are reshaping blockchain competition.
Frequently Asked Questions (FAQ)
Q: Has any blockchain already surpassed Ethereum in users?
A: Yes — BNB Chain, Tron, and Polygon regularly report higher daily active addresses than Ethereum. However, they lag significantly in TVL, developer activity, and decentralization.
Q: Why does Ethereum still lead if it’s slower and more expensive?
A: Because users prioritize security, decentralization, and liquidity over raw speed or low fees — especially for high-value transactions.
Q: Which L1 is most likely to challenge Ethereum?
A: Solana is currently the strongest contender due to its high-performance architecture, active community, and unique innovations like compressed NFTs and mobile-first design.
Q: Do new L1s have a chance against established ecosystems?
A: It’s challenging. New chains must overcome powerful network effects, liquidity gaps, and trust deficits — unless they offer truly groundbreaking technology or capture a new use case.
Q: Are Layer 2s making L1 competition obsolete?
A: Not obsolete — but redefined. L2s extend Ethereum’s capabilities rather than replace it, raising the overall threshold for competition.
Q: Is predicting a single “winner” realistic in crypto?
A: Probably not. The future is likely multi-chain, where different blockchains serve different purposes — though Ethereum may remain the dominant settlement layer.
Final Thoughts: Beyond Zero-Sum Thinking
The question “Can any L1 surpass Ethereum?” assumes a zero-sum game. But in reality, innovation benefits the entire ecosystem. While Ethereum maintains a strong lead in decentralization, liquidity, and developer mindshare, competition drives progress.
Solana represents the most credible architectural alternative today. Meanwhile, emerging technologies like ZKPs, modular blockchains, and AI-integrated networks could redefine the landscape entirely.
Rather than betting on a single winner, investors and builders should stay adaptive — monitoring trends, embracing experimentation, and recognizing that leadership in crypto is earned not just through technology, but through sustained community trust and resilience.
The race isn’t over — it’s evolving.