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The dynamic landscape of high-performance layer-one blockchains (L1s) is seeing the rise of new contenders. These platforms are pushing the boundaries of blockchain speed, scalability, and developer accessibility. However, they face incredibly stiff competition with the established giant Solana, which has already set a high benchmark for performance and network adoption.
Below, I take an in-depth look into what I believe to be three of the leading contenders in this space— Sui, Sei and Berachain—and the ongoing battle to become the blockchain of choice for future dapps.
Key Takeaways
- Sui, Sei and Berachain are all vying for a place in the next generation of high-performance layer-one blockchains (L1s). Each boasts unique features and substantial backing, aiming to challenge established players like Solana.
- Solana remains the gold standard for high-speed L1s. With upcoming upgrades like Firedancer, it will be difficult for new entrants to outpace Solana unless it encounters severe scaling or security issues.
- The sentiment and narrative around these L1s often precede actual adoption and price action. Currently, Solana leads the narrative, while Sui and Berachain are quickly gaining attention for their innovative approaches.
- These next-gen blockchains offer promising infrastructure, but widespread adoption is still missing. The first to host a breakthrough dapp may very well build an insurmountable lead over the others.
The Battle Beyond Speed: Differentiating Next-Gen L1s
These next-gen L1 blockchains—Sui, Sei and Berachain—are characterised by their impressive speed and cost-effectiveness. Each has been engineered to offer rapid transaction processing with minimal fees, making them highly appealing to both developers and users. (Note, I left out Monad from this post as Victor covered it a few months ago and its mainnet release is still a while away.)
However, this creates a unique challenge: how can they differentiate themselves when the core user experience—speed and cost—is already optimised across the board?
For the average user, distinguishing between these high-performance blockchains can be difficult. They all provide near-instant transaction speeds and low fees, which are significant improvements over older, slower blockchains like Ethereum. But because they all perform so similarly, the technological differences between them become less noticeable to end users.
This similarity in user experience means that these blockchains must find other ways to stand out. The real battleground will likely be in the specific ecosystems they cultivate, the dapps they host, and the communities they build around their technology. Being fast and cheap is no longer enough; the blockchain that can attract and retain developers to create compelling and widely-used apps will likely emerge as the leader.
Solana’s Position
Solana has long been the benchmark for high-speed L1 blockchains, with a strong community and extensive ecosystem. Its upcoming Firedancer upgrade, developed by Jump Crypto, is expected to further enhance its infrastructure by drastically improving throughput and reducing latency.
This upgrade is poised to keep Solana at the forefront of the blockchain space, making it even harder for new entrants to displace its dominance. However, for these next-gen L1s to gain significant ground, Solana would need to falter—perhaps through scalability issues, network outages, or a failure to continue attracting developers and projects.
“Literally the goal of Solana is to carry transactions as fast as news travels around the world — so speed of light through fiber.”
– Anatoly Yakovenko (CEO & Co-Founder, Solana Labs)
The Basic Comparison Between Sui, Sei & Berachain
Sui and Sei are live on mainnet, so we can compare some metrics with Solana. Berachain, however, is still in its testnet phase.
Daily Active Addresses (DAAs)
DAAs are a key metric for the success of any blockchain ecosystem. This number reflects the actual engagement within the blockchain’s network and can be a leading indicator of long-term success.
As per the below chart of DAAs, Solana (~5.4M) clearly leads, followed by Sui (~589,000) and Sei (~52,100). Of note, after a huge run-up to 1.6M DAA driven by significant targeted marketing and incentive programs, Sui recently consolidated to around 400,000 before starting to climb. Solana’s dominance in this area underscores its established position, while newer chains like Sui and Sei are still in the early stages of user adoption.
DAAs since Jan. 1, 2024 (Source: Artemis)Total Value Locked (TVL)
TVL is another critical factor in evaluating these blockchains. This metric measures the total capital or assets locked within DeFi protocols and applications built on a blockchain. High TVL numbers often indicate strong user confidence in the platform and widespread adoption.
The success of L1 blockchains has historically been driven by increasing TVL. As more value is locked into a network’s ecosystem, it attracts additional developers, projects, and liquidity, creating a virtuous cycle of adoption. A growing TVL is often a strong signal that a blockchain is gaining traction and building a robust ecosystem, increasing its competitiveness.
TVL since December 2023 (Source: DefiLlama)Rollout of Apps
The typical rollout for any L1 blockchain starts with DeFi apps, focusing on core protocols such as Automated Market Makers (AMMs) for token swapping, lending/borrowing platforms, and liquid-staking solutions. Once the DeFi ecosystem is established, the focus shifts to NFT marketplaces, which help drive user engagement and creativity. Recently, the latest trend has been the rise of memecoin creation, which generates community excitement and acts as an entry point for users, adding another dimension to L1 ecosystems.
Key projects underpinning Ethereum, Solana, Sui, Sei and BerachainAll three of these chains, including Berachain on testnet, have already gotten these basics in place, audited and working. These foundational components allow for the incentivisation of users through yield farming, airdrop farming, and investment speculation. Without these proven L1 use cases thriving, an L1 will ultimately fail—but these are copycat products, and we’re still waiting for the killer app. More on this later.
Points of Difference
Sui: SuiPlay Gaming Unit & zkLogin
One of the key points of differentiation for SUI is its SuiPlay gaming unit, currently in its presale phase. SuiPlay is being positioned as a dedicated gaming platform built on Sui’s blockchain, with a focus on offering low-latency and high-performance experiences for web3 games.
The presale launch of this gaming unit has generated significant interest, with more than 1,500 opening-day sales. It aims to bridge the gap between blockchain technology and mainstream gaming. Given the lacklustre performance of the gaming narrative on blockchains to date, this is an interesting area to watch.
This move mirrors Solana’s strategy with its Solana Phone, which was designed to integrate blockchain capabilities into everyday consumer technology. The success of the Solana Phone is really yet to be determined, as is the success of the SUIplay gaming unit. Anecdotally, it appears that the current pre-ordered units of 1,500+ are purely speculative plays, with expected airdrops similar to those seen with the Solana Phone. Whether these products will drive meaningful adoption or simply act as speculative assets remains to be seen.
zkLogin is another of Sui’s distinguishing features, a novel solution that allows users to log in to blockchain apps using their existing credentials from services like Google or Facebook. This makes Sui one of the first blockchains to offer such a seamless login experience, reducing the complexity and friction typically associated with dapps.
While decentralisation purists may argue that using traditional accounts like Google for blockchain access compromises privacy and security, zkLogin provides an easy on-ramp for mainstream users unfamiliar with managing private keys.
This breakthrough could significantly boost adoption by offering a familiar and user-friendly login process, without requiring users to navigate complex wallet setups. Who needs to leverage Ethereum’s network effects when you can tap into Facebook and Google’s network effects?
Sei: Optimised for Trading & Compatible With Ethereum
Initially, Sei positioned itself as a blockchain with a specialised focus on decentralised finance (DeFi), tailored for decentralised exchanges (DEXes), trading apps and financial services that required high speed and low latency. However, Sei has since broadened its vision from being a DeFi blockchain to a general-purpose one.
“Sei is the first parallelised EVM, resulting in us getting the best of both Ethereum and Solana in a way. You’re able to get the EVM, and all the mindshare, tooling and developers that come with it, while also getting the kind of performance you see with a chain like Solana.”
– Jay Jog (Co-Founder, Sei Labs)
This is a smart pivot for Sei. While being heavily focused on DeFi might appeal to developers, retail users typically don’t care. Unless Sei can be 10x better at providing DeFi apps, it’s hard to see how it would stand out in a crowded field. Shifting to a more general-purpose approach opens up opportunities to attract a wider audience.
Another key point of difference for Sei is its V2 upgrade, which has already enabled Ethereum Virtual Machine (EVM) integration. This upgrade allows Sei to interact seamlessly with Ethereum-based dapps and tools, making it easier for developers to build on Sei while leveraging the vast existing Ethereum ecosystem. EVM integration also positions Sei to attract more developers and users familiar with Ethereum, further broadening its reach and improving compatibility across blockchain networks.
Berachain: Is It a Layer 1 or a Meme?
Berachain stands out not for its technical innovations but for its origin story and strong community identity, raising the question: is it a serious L1 blockchain or a meme? Birthed from the Bong Bears NFT collection, Berachain has leaned into a whimsical and meme-driven brand built around the theme of bears.
This identity has become a core part of its culture, drawing in a devoted following and adding a unique narrative to its positioning in the crowded blockchain space. Is this meme-driven L1 a stroke of genius, or like most memes, just a fad? It’s hard to say for sure, but in a world of copycat blockchains, something so unique and community-focused could help accelerate network effects.
What else sets Berachain apart from other L1 blockchains is its triple-token system, which consists of:
- Bera (BERA): The gas token of the ecosystem.
- Honey (HNY): A stablecoin within the ecosystem, adding stability to liquidity and trading functions.
- Bera Governance Token (BGT): The governance token. BGT is soulbound (i.e. non-transferable) and is awarded by providing liquidity in Berachain’s DeFi System. It can be burned 1:1 for BERA, but the inverse is not possible.
Berachain is also an EVM-compatible chain, which allows it to seamlessly integrate with the existing Ethereum-based dapps and developer tools. This compatibility enables developers to easily port Ethereum dapps over to Berachain, leveraging Ethereum’s vast network effects without needing to overhaul their codebases.
The Berachain founders are pseudonymous, and while this isn’t unusual in crypto, it detracts from the trust that an L1 blockchain needs. In a world of well-known figures like Anatoly Yakovenko (Solana) and Vitalik Buterin (Ethereum), can a blockchain succeed without a prominent figurehead to promote adoption? The lack of a public leader may pose challenges for Berachain as it seeks to build credibility and long-term trust in the market.
For more on Berachain, watch the below 15-minute presentation that Smokey The Bera gave in April of this year.
Potential Return on Investment (ROI)
The much higher FDVs of SUI and SEI—relative to their market caps—are common with newer projects, as tokens are often locked up for founding teams and VCs. When these unlocks occur, there can be selling pressure on the tokens as these early risk-takers take some profit. However, in a shorter time horizon, particularly during a euphoric stage of a bull market, this impact is typically less pronounced.
For reference, SOL reached a $75B market cap during the 2021 bull market, while LUNA hit $40B. If SUI and SEI see similar adoption, the ROI potential could be substantial. SUI could potentially offer a 15–30x return, while SEI could present an enormous 40–75x return, depending on market conditions and the success of their respective ecosystems.
Risks
As with any new blockchain, Sui, Sei and Berachain carry several risks. Despite their potential for high returns, these risks should be carefully considered.
The biggest risk for these chains is network adoption. With the L1 space being so competitive, there is simply no guarantee that all this blockspace is necessary or will be utilised. The reality is that we may not need as many L1 blockchains as are being built today. Each new chain is competing for the same pool of developers, users, and liquidity, and the risk of oversaturation in the market is real. If these chains fail to attract a robust, active user base, their impressive technology and high-performance infrastructure may go largely unused, leading to stagnation and irrelevance.
Unlike projects such as LUNA and UST, which rapidly collapsed due to flawed designs, these L1s are not necessarily at risk of immediate catastrophic failure. However, without strong network adoption, they face the risk of dying a long, slow death, similar to what we’ve seen with the likes of EOS and ADA. If they fail to capture market share and host the killer dapps that drive widespread adoption, they could struggle to maintain relevance over time.
Narrative & Sentiment: The Key to Success?
Berachain, with its unique meme origins, could easily connect culture and narrative as a key differentiator. Similarly, Sui is leaning heavily on its association with the ex-Facebook team, providing an element of trust and brand recognition.
Sei, on the other hand, may sway developers with its DeFi-focused capabilities and EVM compatibility. Combine this with the obvious incentive programs used to attract attention, liquidity, and users into the space—this is essentially a bootstrapping technique to gain adoption.
In the end, I believe the chain that attracts the most attention early will win the narrative game, which, in a technological-neutral battleground, could mean winning the entire game.
Where Is the Killer Dapp?
The analogy of high-speed rail networks without trains is particularly apt for the current state of these next-gen blockchains. Imagine these L1s as the latest high-speed railroads, built with state-of-the-art technology and designed to handle vast amounts of traffic quickly and efficiently. However, the true value of these railroads is only realised when trains—representing dapps and users—start running on them.
Today, these blockchains offer incredible infrastructure with immense potential, but they are still waiting for the ‘killer dapp’ that will drive widespread adoption and justify their capabilities. The competition to become the dominant L1 might well be won by the blockchain that successfully hosts such a transformative app. For instance, Ethereum’s early success can be mostly attributed to the proliferation of DeFi projects which effectively became the trains that filled its tracks.
Similarly, the first of these next-gen L1s to host a breakout dapp could rapidly pull ahead of its competitors. This dapp could be anything from a groundbreaking DeFi protocol to a revolutionary gaming platform or a highly scalable social network. Until then, these blockchains remain high-speed networks with incredible promise, but their true potential remains untapped.
Conclusion
The battle among next-gen L1 blockchains is heating up, with Sui, Sei, and Berachain all bringing innovative solutions and growth strategies to the table. However, they must contend with the established dominance of Solana, which continues to set the standard for high-speed blockchains. The ultimate winner in this race may well be the blockchain that not only provides superior infrastructure but also becomes the platform of choice for the next ‘killer dapp’.
As the blockchain space evolves, the success of these platforms will depend on their ability to attract developers, users, and compelling use cases, transforming their high-speed networks into bustling ecosystems of innovation and activity. Early investors who choose the right platform could see significant returns, especially if these blockchains achieve even a fraction of SOL’s market cap. However, with higher potential rewards come higher risks, making careful consideration and research essential.
So, what’s my take? While I love Berachain’s meme origins, I can’t see non-crypto consumer brands and financial institutions taking it seriously enough to hold tens of billions of dollars in value. Sui and Sei both launched at similar times, but their level of usage is miles apart.
My winner is Sui. It’s showing real signs of network adoption, and its zkLogin feature is breaking down barriers to entry, making blockchain more accessible to the average user. This combination of adoption and usability gives Sui a strong advantage in the race to be the next major L1.
How Am I Personally Playing It?
I’m going to buy SUI, I’m less interested in finding a perfect entry and will just allocate directly with no DCA given how close we are to October and the tendency for markets to move in Q4.
This is still a high-risk play, so I’ll only dedicate a small percentage of my portfolio to it. I intend to hold it for this cycle and aim to sell my entire position in the next 6–12 months. If it performs like SOL or LUNA, it has major upside potential, but in a bear market, a 95% drop is also probable.
While I’ll keep following them in this bull market, I’m arguably more excited to monitor Sui and others during the next bear market to see which next-gen L1s will rise from the ashes.
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DISCLAIMER: The information on this blog post is for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal or financial product. Block Earner does not recommend or endorse any particular token.
