In 2025, Layer1 tokens collectively plummeted, but the fundamentals did not collapse: Where did the issues with L1 public chains lie?
In 2025, the overall value of Layer-1 (L1) public chain tokens experienced a significant downturn, with prices notably underperforming the market, sparking widespread discussions among investors about whether “L1 has already reached its end.” However, from on-chain data and user behavior, this decline appears more like a valuation re-pricing rather than a fundamental collapse.
According to an analysis report released by Schizoxbt on December 25, most mainstream L1 tokens saw substantial retracements in 2025. Ethereum declined by 15.3% for the year, Solana dropped 35.9%, Avalanche and Sui both fell over 67%. TON performed the weakest, with a year-to-date decline of 73.8%. Among the mainstream L1s, only BNB and TRX bucked the trend, recording increases of 18.2% and 9.8%, respectively. This indicates that in a risk-averse market environment, market capitalization has become less effective in supporting token prices.
But prices do not tell the whole story. On-chain revenue and fee data reveal a very different picture. Token Terminal data shows that the monetization capacity of Layer-1 networks has not significantly declined. Over the past 365 days, Tron led with approximately $3.5 billion in on-chain revenue; Ethereum generated about $305 million, Solana around $207 million. In terms of fees, Solana accumulated about $699 million, Ethereum about $549 million, and BNB Chain also generated approximately $260 million in fee income, demonstrating that their actual usage value remains solid.
User activity has also not experienced large-scale loss. BNB Chain has about 59.8 million monthly active addresses, Solana around 39.8 million, and NEAR about 38.7 million. Sei Network’s active addresses have exceeded 10 million, approaching Bitcoin levels, while Ethereum remains stable at around 9.3 million. Data indicates that Layer-1 networks still carry a substantial demand for real transactions.
Overall, the core reason for the 2025 L1 token price decline is the fading of speculative premiums, rather than a loss of network competitiveness. Capital is refocusing on blockchains that can continuously generate transaction volume, fees, and on-chain revenue. For investors concerned with the fundamentals of Layer-1 public chains, the long-term value of L1 tokens, and real blockchain use cases, this phase is more like a rebalancing after a bubble burst rather than an endgame.
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