Layer 1 blockchain tokens had a punishing year in 2025. Despite steady developer activity, many of the biggest names in the space saw their prices collapse—some by as much as 73%, according to OAK Research’s latest end-of-year report.
While Bitcoin held up relatively well, most alternative Layer 1 tokens were hit by heavy sell-offs. The report suggests this wasn’t just market noise, but a sign of deeper problems—weak token economics, poor value capture, and fading investor patience. In short, the market moved away from speculation and began demanding real economic activity.
Users moved around, but growth stalled
Rather than growing, the overall user base shrank. Monthly active users across major blockchains fell by 25%, with activity simply shifting from one network to another.
Solana was hit the hardest, losing nearly 94 million users, a drop of more than 60%. BNB Chain, on the other hand, benefited from the churn and nearly tripled its user base by attracting those leaving other ecosystems.
Layer 2 networks told a similar story. Base stood out as a rare winner, growing its total value locked (TVL) by 37% to $4.41 billion, helped by Coinbase’s distribution. Optimism went the opposite way, with TVL shrinking 63% as capital rotated toward more aggressive competitors.
Prices reflected a harsh reality
Token prices painted an unforgiving picture. Of all major Layer 1 tokens tracked since January, only two finished the year in the green:
BNB rose 18.2%
TRX gained 9.8%
Everything else struggled. Solana fell nearly 36%, while newer players like TON and Avalanche plunged by more than 67%.
Layer 2 tokens fared even worse. Optimism and zkSync dropped over 84%, while Polygon and Arbitrum lost more than 73%. Mantle was the lone exception, posting a modest gain—but the report attributes that more to tight token supply than real fundamentals.
OAK Research points to three main reasons behind the collapse:
Heavy token unlock schedules flooding the market
Weak links between network usage and token demand
Institutional investors favoring Bitcoin and Ethereum over smaller chains
Builders kept building—even as prices fell
Interestingly, developer activity stayed strong. Data from Electric Capital shows that the Ethereum ecosystem still leads in total contributors, while Bitcoin recorded the fastest growth in full-time developers over the past two years.
Solana’s developer base also grew sharply, up nearly 76%, signaling continued technical ambition even as its token price suffered.
The disconnect between developer momentum and token prices, the report says, reflects a more mature market—one that no longer rewards infrastructure projects without a clear path to revenue.
Revenue becomes the new north star
By 2025, the message was clear: protocols without real revenue are at risk of fading away.
The industry shifted firmly toward what the report calls the “revenue meta,” where actual cash flow mattered more than vision or hype. Stablecoin issuers dominated this category, generating 76% of total protocol revenue. Tether and Circle alone brought in nearly $9.8 billion annually, while derivatives platforms like Hyperliquid added over $1 billion through sustainable fee models.
Generic Layer 1s and Layer 2s struggled to compete. Without clear differentiation or massive performance improvements, many simply couldn’t justify their existence.
A difficult road ahead
Looking toward 2026, the outlook remains tough. High inflation rates, weak demand for governance tokens, and value concentrating in a few dominant layers point toward further consolidation.
While protocols with real revenue may find some stability, they remain exposed to Bitcoin’s volatility and ongoing token unlock pressure. According to the report, the survival of most Layer 1s now depends heavily on leaders like Ethereum and Solana—and whether renewed institutional interest returns.
Without that support, many infrastructure tokens risk slipping into irrelevance as capital continues to favor networks that deliver economic value, not just technical promise.
