Overview of the Public Chain Industry in February 2025: Market Adjustment and Innovation Coexist

In February 2025, the blockchain market experienced significant adjustments, impacting both mainstream and emerging public chains. Bitcoin demonstrated strong resilience, further solidifying its dominant position in the market, while most public chains such as Solana, Avalanche, and Ethereum faced substantial declines. Nevertheless, development activity in the public chain sector remained vibrant, with highlights this month including the launch of the Berachain mainnet, upgrades to the Base infrastructure, and the rollout of Uniswap Layer 2.

Market Overview

The market saw a significant correction in February: Bitcoin fell from $98,768 to $84,177, a decrease of 14.8%; Ethereum suffered an even larger decline, dropping from $3,065 to $2,216, a decrease of 27.7%. In the last week of the month, panic triggered by security concerns spread, further intensifying the selling pressure.

This pullback closely follows January's bull market, but market signals are complex, with investors oscillating between optimistic sentiment and concerns raised by security vulnerabilities. Market sentiment has deteriorated, and risk appetite has declined, especially in highly speculative areas such as Memecoins. Globally, the North American market shows cautious optimism due to policy changes, while the Asia-Pacific market has felt the impact of hacker attacks more acutely.

Regulatory and Policy Changes

The U.S. government's cryptocurrency executive order focuses on self-custody and the development of stablecoins, providing the industry with rare policy clarity. However, a major hacking incident on February 21 resulted in losses of up to $1.5 billion, setting a record for the largest loss in cryptocurrency history, raising new security concerns and causing market sentiment to shift rapidly. Meanwhile, the SEC's stance has softened, suspending investigations into several cryptocurrency companies and dropping the appeal of the "dealer rule." The bipartisan GENIUS Act (the U.S. Stablecoin National Innovation and Establishment Act) further refines the regulatory framework for stablecoins, indicating a friendly trend in the U.S. regulatory environment.

Investor behavior reflects this turbulence. The Memecoin craze driven by the Argentine president's related tokens has quickly cooled due to negative news, leading to a sharp decline in valuation and a significant drop in trading volume. This shift suggests that the market is retreating from high-risk assets.

Layer 1 Public Chain

Layer 1 public chains are generally under pressure, with a total market value decline of 20.8% to $2.3 trillion. Bitcoin's dominance rose from 71.3% to 74.2%, while Ethereum's share shrank from 14.0% to 11.9%. The share of BNB Chain slightly increased to 3.7%, but Solana's share fell from 4.0% to 3.3% after a price crash of 36.3%.

Litecoin moves against the trend, rising 1.0% to $128.7, while Solana (-36.3%), Avalanche (-35.7%), and others lag behind.

DeFi TVL decreased by 20.0% to $82.9 billion, with Ethereum at $44.9 billion (down 21.7%) and Solana at $8.6 billion (down 34.1%).

Berachain has risen rapidly, ranking sixth after the mainnet launch on February 6, with a TVL of $3.2 billion. The chain has issued 80 million BERA tokens and employs a "proof of liquidity" model—an innovative staking method that converts liquidity into network security. Following significant financing in 2024, this month's airdrop and governance rights have sparked market enthusiasm. Unlike traditional proof of stake, this approach may redefine how public chains balance growth and stability, making Berachain a project worth watching.

The Memecoin craze of Solana has clearly cooled down. High-profile failures have undermined market confidence, leading to a significant decline in trading volume on certain DEX platforms. Although Memecoins will not disappear and can be seen as digital collectible cards, their peak frenzy may have passed, and traders are starting to pay more attention to fundamentals rather than speculation.

Bitcoin Layer 2 and Sidechains

The TVL of Bitcoin L2 and sidechains has decreased from $2.7 billion by 24.5% to $2.1 billion. Core leads with a TVL of $460 million (down 42.0%), followed by Bitlayer ($350 million) and BSquared ($320 million). BOB performed well, only dropping 7.9% to $220 million.

Among mid-sized platforms, Merlin performed relatively well, with a slight decrease in TVL of 9.3% to $150 million. Smaller platforms faced greater pressure, with SatoshiVM down 31.5%, MAP Protocol down 29.6%, and Interlay down 27.4%.

The stagnation in this field aligns with the views of industry experts: "As the initial enthusiasm wanes, over two-thirds of existing Bitcoin Layer 2 projects will disappear within three years." The industry downturn in February suggests that consolidation may have already begun. Looking ahead, platforms that can demonstrate real utility may prove to be more enduring than projects that rely solely on momentum.

Ethereum Layer 2

Ethereum L2 TVL fell by 23.4% to $14 billion. A certain trading platform maintained its leading position with a TVL of $4.5 billion (down 33.4%), while another platform climbed to second place with a TVL of $4.2 billion (down 10.6%), pushing another platform ($2.1 billion) to third. Polygon zkEVM surged by 104.1% to $30 million, becoming a rare highlight this month.

A certain platform has launched Flashblocks (faster transaction confirmations), Appchains (customized L3), and smart wallet sub-accounts, aimed at maintaining user engagement. Unichain's mainnet launched on February 16, having previously processed 95 million transactions on its testnet, positioning itself as a game changer for scalability performance, with several heavyweight institutions joining. Starknet's Nums application chain, as a Layer 3 gaming innovation, showcases the future of modular design.

At the same time, although Sonic EVM is not an Ethereum Layer 2, its Mobius mainnet launch on February 27 as Solana's first SVM chain expansion attracted a lot of attention, achieving 10,000 TPS, and brought $47.6 million in funding to a certain DeFi platform within just a few days. These initiatives indicate that Layer 2 projects are increasingly investing in technology rather than just hype.

The founder of Ethereum commented on February 19, emphasizing that Ethereum needs to clarify its positioning amid increasing competition. He advocates for Layer 2 to play a leading role in scalability (such as a 17-fold increase in transactions) and interoperability, pointing out that they have evolved from "advanced multi-signatures" into a robust network. Although he did not directly comment on Sonic EVM, its EVM compatibility and speed resonate with his vision of a seamless connection to the "Ethereum universe." However, he also expressed dissatisfaction with the casino-like tendencies in the ecosystem, calling for a focus on real value rather than speculative bubbles.

Financing Status

Funding activities have slowed down, with a total of 6 transactions completed in February, amounting to $32.4 million. Mango Network raised $13.5 million for its EVM-MoveVM hybrid chain, with plans to launch in the first quarter of 2025. Fluent Labs secured $8 million in funding to develop a multi-virtual machine Layer 2 that connects Ethereum and Solana.