Trading Volumes Across Layer 1 Networks Hit New Yearly Lows

August was a fairly quiet month for crypto that saw overall trading volumes, liquidity and network transaction fees in Layer 1s decline considerably, marking new year-to-date lows for Layer 1 network activity.

Layer 1s across the board saw their valuations decrease month-over-month, with Ethereum 's market cap alone falling $25.4 billion for a loss of 11.4% between August 1st and September 1st. Avalanche , Cosmos Hub, Osmosis Labs , and Canto saw the largest declines in market cap, all with month-over-month losses exceeding 20%, pointing to a potential decline in market interest in multi-chain networks.

Total value locked in DeFi protocols fell near-universally across Layer 1s in August, led by $1.2 billion and $562 million exiting the Ethereum and TRON DAO ecosystems, respectively. With federal interest rates remaining near historical highs, the risk versus reward calculation for lending or providing liquidity on DeFi protocols remains unfavorable for users at this time.

Trading volumes on decentralized exchanges, which are consistent with user activity on Layer 1 networks, reached a year-to-date low of $56.8 billion, arriving at levels last seen in December 2022.

We also saw total transaction fees fall dramatically across Layer 1s as Ethereum users paid $41 million fewer in fees to use the network in August than in July. BNB Foundation and Avalanche saw month-over-month declines of 28% and 41%, respectively.

For more on the August Layer 1 Landscape, take a look at a new report from our Research Analyst, Kevin Peng , with a trial subscription to The Block Pro.