In the current bull run, a curious trend has emerged: layer-1 coins like Solana (SOL), Avalanche (AVAX), and Cardano (ADA) are outperforming layer-2 tokens like Arbitrum (ARB) and decentralized finance (DeFi) assets like Uniswap (UNI) and MakerDAO (MKR).
Layer-1 Tokens Like Solana Leads The Performance Chart
Taking to X on December 13, Thor Hartvigsen, a data-driven decentralized finance (defi) researcher, noted that layer-1 coins under observation, like AVAX and SOL, are, on average, up 50% in the past month.
On the other hand, layer-2 coins like ARB and OP and DeFi tokens, like UNI and DYDX, are trailing, only adding around 10% during the same period.
Overall, the broader crypto market is on an uptrend, edging higher, with some, like Solana (SOL) and Bitcoin (BTC), completely reversing post-FTX collapse losses in November 2024.
Buoying this stellar price action is the noticeable improvement in sentiment due to improving regulatory developments and, most importantly, a revival in trading activity after the sharp contraction in 2022.
However, as highlighted above, the divergence in performance between layer-1, layer-2, and DeFi tokens raises questions about the underlying factors driving market preferences and the strategic positioning of various crypto asset classes.
One possible explanation for the Solana,
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Author: Dalmas Ngetich
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