Author: Kane Pepi/ Source
Translation: vernacular blockchain
The role of Layer 1 cryptocurrencies in the cryptocurrency world is crucial, providing the framework for blockchain networks and providing scalability, security, and decentralization.
As we look ahead to 2024, understanding the dynamics of these platforms is critical for investors seeking the growth potential of the cryptocurrency industry.
This article lists the best Layer 1 cryptocurrency projects of 2024, exploring their unique features and advantages they offer.
1. Layer1 cryptocurrency list
For anyone interested in Layer 1 projects, here is a short list of Layer 1 blockchains:
Bitcoin (BTC): As the world’s first and largest cryptocurrency with the highest market capitalization, Bitcoin remains the preeminent Layer 1 project. Bitcoin has a limited supply of 21 million tokens, making it an ideal store of value. Bitcoin will usher in its next halving event in April 2024, which may trigger a longer-lasting bull market. Bitcoin is also expected to receive its first ETF approval from the U.S. Securities and Exchange Commission.
Ethereum (ETH): Thousands of secondary tokens operate on the Ethereum blockchain, making it the most popular Layer 1 blockchain for developers. Ethereum has it all, from the Metaverse and play-to-earn games to the decentralized finance ecosystem. Despite Ethereum's massive market capitalization, many analysts believe its actual value represents only a fraction of its future potential.
Solana (SOL): This Layer 1 blockchain offers a great alternative to Ethereum in terms of speed, cost-effectiveness, and scalability. Solana can handle smart contracts and decentralized applications without sacrificing security or energy efficiency.
BNB (BNB): Powering the world’s largest cryptocurrency ecosystem, BNB is Binance’s Layer 1 blockchain. Settling transaction fees on the BNB chain is mandatory and offers a 25% discount on Binance fees. BNB is a deflationary Layer 1 project; Binance frequently removes the token from the circulating supply. Investors can buy BNB at a price that is 66% lower than its all-time high price.
Ripple (XRP): This Layer 1 blockchain facilitates cross-currency transactions between financial institutions. XRP provides a real-time liquidity bridge, ensuring its solid long-term utility. Ripple is used by some of the world’s largest banks, meaning it could eventually replace the SWIFT network. XRP is up 60% in the past 12 months, but is down 84% from its all-time high.
Cosmos (ATOM): Launched in 2019, Cosmos developed the Inter-Blockchain communication protocol. This allows rival blockchains to communicate and share data without the need for a centralized provider. ATOM is the Layer 1 cryptocurrency that powers the universe. It is currently trading 78% below its all-time high price. ATOM's market capitalization exceeds $3.7 billion.
Avalanche (AVAX): A Layer 1 blockchain network that claims to be capable of unlimited scalability, Avalanche provides near-instant transaction confirmations. Avalanche also enables ERC-20 projects to bridge to its network, charging 0.025% of the amount bridged. Its native cryptocurrency AVAX is trading 85% below its all-time high in 2021.
Cronos ( CRO ): Powering the Crypto.com trading platform, Cronos is a Layer 1 blockchain with high scalability and low fees. The Cronos network supports smart contracts and dApps, and transaction fees are paid in CROToken. The point is, CRO gives you exposure to the Crypto.com trading platform, which aims to increase its market share in the next bull market.
Stellar ( XLM ): Launched in 2014, Stellar is a Layer 1 blockchain that enables fast, cheap, and scalable cross-border transactions. It has partnered with IBM, MoneyGram and other well-known entities. XML is the project’s native cryptocurrency and has a current market cap of $3.4 billion. Today investors can enjoy an 86% discount to the all-time high price.
Polkadot (DOT): Another top Layer 1 blockchain that is driving the development of network interoperability, Polkadot hopes to become the "blockchain within the blockchain" in the Web 3.0 era. As one of the most energy-efficient Layer 1 protocols, Polkadot has a market capitalization of nearly $8 billion. DOT, its native token, is down 90% from its all-time high.
Kaspa (KAS): One of the fastest growing cryptocurrencies, Kaspa has gained over 7000% since its launch in July 2022. This Layer 1 cryptocurrency has grown over 1800% in the past 12 months. Kaspa uses a proof-of-work model but can confirm transactions in seconds.
Sei (SEI): This is a new Layer 1 project launched in August 2023. Since then, Sei has gained over 3,400%, making it one of the best-performing cryptocurrencies this year. The Sei blockchain can handle up to 20,000 transactions per second and has a finality speed of 380 milliseconds.
2. Best Layer 1 Cryptocurrency Projects – Comprehensive Analysis
The following sections will help you understand the long-term potential of each of the above-mentioned Layer 1 cryptocurrencies. Read on to discover the best Layer 1Tokens for your portfolio.
1) Bitcoin (BTC): The Overall Best Layer1 Blockchain for Long-Term Investors
While the short-term gains may be mild compared to other cryptocurrencies, we still think Bitcoin is the best overall choice. This is the original Layer 1 blockchain launched in 2009. Bitcoin has the largest market capitalization of all cryptocurrencies. At its peak, it was worth over $1.4 trillion.
This was at a time when Bitcoin was trading close to $69,000. Bitcoin fell to below $16,000 last year but has since recovered to over $61,000.
There is a lot of bullish sentiment surrounding Bitcoin right now. First, analysts predict that the U.S. Securities and Exchange Commission will approve the first Bitcoin exchange-traded fund (ETF) in 2024. This could trigger a massive influx of institutional investment.
Equally noteworthy is Bitcoin’s next halving event; expected to occur in April 2024. This will reduce the 10-minute supply of new Bitcoins by 50% to 3.125 BTC. Ultimately, while some analysts believe Bitcoin could break $100,000 next year, this could be just the beginning. Therefore, we are confident that Bitcoin is one of the top Layer 1 cryptocurrency projects among long-term holders.
2) Ethereum (ETH): The most popular Layer 1 blockchain favored by dApp developers
Ethereum is the most popular Layer 1 cryptocurrency project favored by decentralized application (dApp) developers. Although most dApps are inactive, there are hundreds of thousands of secondary tokens on the Ethereum network. Those active tokens represent some of the largest cryptocurrencies by market capitalization. These include Metaverse projects such as Sandbox, Axie Infinity, and Decentraland.
Ethereum also hosts some of the best decentralized exchanges, including Uniswap and Sushiswap. Decentralized financial platforms also prefer Ethereum, whether it is Aave, Yearn.finance or Compound. Crucially, every project on the Ethereum network uses ETH to pay transaction fees, ensuring that the world’s second-largest cryptocurrency maintains strong demand.
Although Ethereum faces increased competition from other Layer 1 blockchains, it still dominates the vast majority of the dApp market. After all, Ethereum was the first project to launch a smart contract platform, which gave it a huge first-mover advantage. In terms of valuation, Ethereum’s current market capitalization exceeds $350 billion.
It is now trading above $2,900, higher than 12 months ago. However, like most of the top Layer 1 blockchains, Ethereum still trades at attractive discounts. Those who invest today will be purchasing at 58% below its all-time high price of nearly $5,000. Considering BlackRock recently filed an Ethereum ETF application with the SEC, this could be the start of the next bull run.
3) Solana (SOL): One of the most worthy Layer 1 blockchains for long-term investment
Solana is the best Layer 1 cryptocurrency project for long-term investors. The key question for analysts is whether Solana will capture significant market share from Ethereum. According to CoinMarketCap, there are only 218 cryptocurrencies in the Solana ecosystem. In comparison, Ethereum has thousands.
Additionally, most Solana-based projects are cryptocurrencies with tiny market caps and limited trading volumes. Nonetheless, Solana is the better Layer 1 blockchain in terms of performance. This is a crucial metric as dApp developers want their projects to run on the fastest and most efficient blockchains.
While Ethereum can handle around 30 transactions per second, Solana has successfully processed over 65,000 transactions during its testing phase. This makes it more suitable for handling large transaction throughput. In addition, Solana’s transaction fees are also much cheaper than Ethereum, with average transaction fees equivalent to only $0.00025 SOL.
So what is Solana's upside potential? Currently, Solana is one of the best performing cryptocurrencies. SOLToken has grown by over 360% in the past 12 months. SOLToken has grown by over 7,300% since the beginning of 2020. However, you can still get in on the market at a huge discount; Solana is currently trading at $116.25.
4) BNB (BNB): Layer 1 blockchain supporting the Binance ecosystem
BNB, the third-ranked Layer 1 cryptocurrency by market capitalization, is also worth considering. This blockchain network supports the Binance ecosystem. Like Ethereum and Solana, the BNB chain supports smart contracts and dApps. There are thousands of projects operating on BNB, known as BEP-20Token.
When settling fees, BEP-20 projects need to use BNB as the transaction token. BNB is also available on the Binance exchange; it offers a 25% discount on standard trading commissions. BNB is also a deflationary Layer 1 cryptocurrency. This is because Binance frequently burns BNBTokens, meaning they are removed from the circulating supply.
In terms of price action, BNB has gained over 20,000% since its launch in late 2017. Despite this, BNB is down 20% in the past 12 months. Furthermore, BNB’s current price is $376.90, which is approximately 46% lower than its previous all-time high price of approximately $690. Ultimately, Binance is the largest cryptocurrency exchange by trading volume, so BNB provides investors with exposure to its growth.
5) Ripple (XRP): Layer 1 payment network for cross-currency transactions
Ripple is one of the earliest Layer1 blockchains; the network was launched in 2012. The technology is targeted at large financial institutions that need to conduct international transactions. Ripple has streamlined the process, allowing cross-border transfers to be processed in less than five seconds.
Additionally, fees are typically less than a cent, and the network can handle up to 1,500 transactions per second. Ripple is particularly useful for cross-currency transactions, especially when moving funds to emerging countries. Its native cryptocurrency XRP provides real-time liquidity.
This means financial institutions no longer need to use SWIFT, which usually relies on corresponding bank networks. Since some of the world’s largest banks are already using Ripple, XRP is one of the best Layer 1 cryptocurrency projects to consider. The price of XRP in February 2024 is $0.5359.
6) Cosmos (ATOM): Allows Layer1 network to share data Inter-Blockchain Communication
Cosmos is a Layer 1 cryptocurrency project that developed the Inter-Blockchain Communication protocol. Simply put, this enables two or more blockchain networks to share data without using a centralized provider. For example, consider Kava and Cronos, which specialize in decentralized finance and trading services.
The two blockchains operate independently, meaning they have their own consensus methods and underlying code. Normally, Kava and Cronos blockchains cannot communicate. However, when the Cosmos protocol is deployed, Kava and Cronos will be able to share data in real time. This means that the use cases for Cosmos are very broad.
Cosmos has a native Layer 1 cryptocurrency, ATOM. It is required when using the Inter-Blockchain Communication protocol. ATOM's market capitalization exceeds $3.8 billion. Growth has been relatively modest; ATOM is up just 52% since 2019. Additionally, ATOM’s price is down 78% from its all-time high price of almost $45.
7) Avalanche (AVAX): High-performance Layer1 network with unlimited scalability
Avalanche is another high-performance blockchain aiming to gradually eat into Ethereum’s market share. It claims to offer “unlimited scalability,” meaning it can handle an unlimited number of transactions without compromising security . It also provides almost instant transactions, making it ideal for smart contracts and dApps.
Another feature of Avalanche is its ability to support ERC-20 projects. Avalanche charges 0.025% on bridged amounts, with a minimum of $3. According to CoinMarketCap data, 282 projects have been bridged to Avalanche, including Tether, Chainlink, Dai, SushiSwap and Frax.
In terms of price performance, Avalanche is up 63%. While this is below the industry average, Avalanche is trading at a discount of 85% from its 2021 all-time high price. Therefore, investors can get an attractive discount until the next Altcoin season. Avalanche's market capitalization is just over $13 billion, so there's still plenty of room for growth.
8) Cronos (CRO): Crypto.com’s Layer 1 network, trading at a 90% discount
Launched in November 2021, Cronos is one of the new Layer 1 blockchain projects entering the market. It enables scalability, low transaction fees, and can host smart contracts and dApps. Having said that, Cronos is best known for its association with Crypto.com. Crypto.com, considered one of the best cryptocurrency trading platforms, offers some of the lowest trading commissions on the market.
Crypto.com has processed over $1 billion in transaction volume. This represents only a fraction of the $18 billion traded on Binance. However, given that Binance was recently fined $4 billion for money laundering charges, Crypto.com will be confident that it can increase its market share. Therefore, those who invest in the Cronos blockchain will gain exposure to the growth of Crypto.com.
Cronos’ native cryptocurrency CRO is currently worth just $2.4 billion. By comparison, Binance’s BNB is worth over $35 billion. CROToken has grown by 42% in the past 12 months of trading. However, they are trading at 90% below their all-time high, which provides a substantial discount.
9) Stellar (XLM): A cross-border payment network for individuals and businesses
Stellar is an open source Layer 1 blockchain that uses a consensus mechanism proof-of-agreement. Stellar is not only energy efficient but also provides extremely fast confirmation times. Completed in 5-6 seconds on average, Stellar also offers low fees and can scale to 1,500 transactions per second.
Stellar aims to “bank the unbanked” by becoming the de facto payments network for global remittances. Having said that, it also enables businesses to process cheap cross-border transactions. To achieve this, it has partnered with IBM, MoneyGram and other reputed entities. XLM is the project’s native cryptocurrency launched in 2014.
XLM has gone through several bull and bear market cycles. Nonetheless, the token is up 4,000% since its launch. Those who buy XLM today will receive an 86% discount compared to the previous all-time high price. XLM has a market capitalization of $3.2 billion.
10) Polkadot (DOT): Leading interoperability in the Web3.0 era
Polkadot is another Layer 1 blockchain focused on interoperability. Its proprietary network is designed to connect competing blockchains to adapt to the Web 3.0 era. This means that cross-blockchain transfers can be made while remaining decentralized. Polkadot achieves this with high efficiency levels.
Through its nominated proof-of-stake consensus model, the Polkadot blockchain consumes as much energy as 6.6 U.S. households. Polkadot’s native Layer 1TokenDOT has three main functions. First, DOT is a governance token that enables holders to vote on protocol upgrades and fixes. Secondly, DOT is also one of the best staking coins.
Third, DOT is used for "binding," which is a way to facilitate cross-blockchain transactions. According to CoinMarketCap, Polkadot has a market capitalization of over $9.4 billion. DOTToken has not fluctuated much over the past 12 months, with only a slight loss of less than 1%. Based on current prices, DOT is trading 90% below its all-time high price.
11) Kaspa (KAS): Proof-of-work consensus model using single-second confirmation time
Kaspa is one of the fastest growing cryptocurrencies in 2024. Its native token KAS has grown over 1800% in the past 12 months of trading. Since the launch of KAS in July 2022, the Token has grown by more than 7600%.
That being said, Kaspa has a market cap of just $3 billion, so its upward trajectory is likely to continue as we enter a bull market . Additionally, there is now a slight discount of 8% compared to the previous all-time high price. In terms of practicality, Kaspa is a Layer 1 blockchain using the Proof of Work (PoW) consensus mechanism.
However, unlike other proof-of-work networks like Bitcoin, transactions are very fast. Kaspa transactions are typically processed within seconds without compromising security. One of Kaspa's main goals is to increase scalability on a global scale. It currently processes one block confirmation per second, but this rate will increase over time.
12) Sei (SEI): New Layer 1 cryptocurrency with 3400% growth since August 2023
As we enter 2024, Sei becomes one of the hottest cryptocurrencies. Crucially, this is one of the newest Layer 1 blockchains on the market. Sei launched its native cryptocurrency SEI in August 2023, according to CoinMarketCap.
SEIToken has grown over 3400% since its launch. In the last month alone, SEI has grown by 137%. Despite this, SEI's market cap is just over $2.1 million. Considering the other Layer 1 blockchains discussed today have multi-billion dollar valuations, this provides a good entry point for new investors.
So why is Sei so popular now? Simply put, this Layer 1 network can handle up to 20,000 transactions per second. It can complete transaction confirmation in only 380 milliseconds. In addition, the network has been tested with more than 100 million transactions to date, demonstrating extremely high efficiency.
3. Basic knowledge of Layer 1 cryptocurrency
Simply put, Layer 1 cryptocurrencies run on a proprietary blockchain network. They have unique underlying code and their own consensus mechanism. From an investment perspective, Layer 1 cryptocurrencies are an attractive option.
After all, a very small number of active cryptocurrencies are considered Layer 1. In contrast, the vast majority of tokens run on a secondary network. For example, consider that there are over 450,000 tokens built on the Ethereum blockchain. These include Decentraland, Dai, Sandbox and Tether.
These secondary tokens follow the ERC-20 standard and have no impact on how the Ethereum blockchain operates. Therefore, any changes made by Ethereum - whether positive or negative, will directly affect the way ERC-20 Token operates.
The difference between Layer 1 and Layer 2 blockchain
Blockchain terminology can be confusing. Here is a quick overview between Layer 1 and 2 blockchains:
Layer 1 Blockchain: Layer 1 Blockchain is the foundation of decentralized networks. They handle all aspects of the blockchain, including consensus mechanisms, security, and transaction processing. Examples of Layer 1 blockchains include Bitcoin, Ethereum, Solana, and BNB.
Layer 2 Blockchain: Layer 2 blockchain aims to improve upon the shortcomings of Layer 1. This often means increased scalability, lower fees, and faster transactions. For example, Polygon is the best Layer 2 solution for ERC-20 Token, ensuring that projects can operate more efficiently. Layer 2 networks can also help Layer 1 cryptocurrencies increase their use cases, such as supporting smart contracts and dApps.
Both Layer 1 and 2 blockchains play a role in the broader cryptocurrency market. Ultimately, however, Layer 1 networks are more favorable in the eyes of long-term investors.
4 Conclusion
In short, the importance of Layer 1 cryptocurrencies is self-evident, providing a framework for various applications and assets. Our review of the best Layer 1 cryptocurrency projects highlights the reasons for their popularity, as well as their profit potential as investments.
However, we must note that the cryptocurrency market is extremely volatile, so thorough research should be conducted before investing in any cryptocurrency asset.
Source: https://www.techopedia.com/cryptocurrency/best-layer-1-crypto-projects
