GuShiio.com Despite heightened security concerns, the market correction in February 2025 revealed the resilience of public chain infrastructure; Bitcoin’s dominance rose, while Layer 2 innovation continued.
Author: Stella L (stela@footprint.network)
Data source: Footprint Analytics public chain research page
In February 2025, the blockchain market underwent an obvious market adjustment, posing challenges to both established networks and emerging public chains. Bitcoin performed solidly and its dominance further strengthened, while most chains, including Solana, Avalanche and Ethereum, experienced significant declines. Despite this, development activity in the public chain has not slowed down: the launch of Berachain’s main network, the upgrade of Base infrastructure and the launch of Uniswap’s Layer 2 have become highlights this month.
market overview
There was a significant correction in the market in February: Bitcoin fell from $98,768 to $84,177, a drop of 14.8%, while Ethereum fell even more, from $3,065 to $2,216, a drop of 27.7%. In the last week of the month, selling pressure intensified further as security fears spread.
Data source: Footprint Analytics-Bitcoin and Ethereum Price Trend
The correction followed the bull market in January, but market signals were mixed, with investors wavering between optimism and concerns about security breaches. Market sentiment has deteriorated and risk appetite has declined, especially in speculative areas such as Memecoin. Globally, the North American market has shown cautious optimism due to policy changes, while the Asia-Pacific market has felt the impact of hacking more strongly.
Regulatory and policy changes
The Trump administration’s cryptocurrency executive order focuses on the development of self-custody and stablecoins, providing rare policy clarity to the industry. However, the ByBit hacking incident on February 21 resulted in losses of US$1.5 billion, setting a record for the largest loss in cryptocurrency history, triggering new security concerns and market sentiment quickly changed. At the same time, the SEC relented, suspending investigations of companies such as Coinbase, Binance and Uniswap, and dropping its appeal of the “dealer rule.” The bipartisan support of the GENIUS Act (the “National Innovation Guidance and Establishment of U.S. Stabiloins Act”) further strengthens the regulatory framework for stablecoins, showing a friendly trend in the U.S. regulatory environment.
Investor behavior reflects this turmoil. The Memecoin craze, driven by Argentine President Millay’s related tokens, quickly cooled down due to related negative news, with valuations plummeting and trading volumes shrinking significantly. The shift suggests the market is withdrawing from risky assets.
Layer 1
The Layer 1 public chain was generally under pressure, with the total market value falling 20.8% to US$2.3 trillion. Bitcoin’s dominance rose from 71.3% to 74.2%, while Ethereum’s share shrank from 14.0% to 11.9%. BNB chain share rose slightly to 3.7%, but Solana’s share slipped from 4.0% to 3.3% after prices plunged 36.3%.
Litecoin bucked the trend, rising 1.0% to $128.7, while Solana (-36.3%), Avalanche (-35.7%) and others fell behind.
Data source: Footprint Analytics-Public Chain Token Price and Market Value
DeFi TVL fell 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 suddenly emerged and quickly leapt to sixth place after the launch of the main network on February 6, with a TVL of US$3.2 billion. The chain issued 80 million BERA tokens, using a “proof of liquidity” model-an innovative pledge method that transforms liquidity into cybersecurity. Following the US$100 million financing in 2024, this month’s airdrops and governance rights have stimulated market enthusiasm. Unlike traditional proof-of-stake, this approach could redefine how public chains balance growth and stability, making Berachain a project worthy of attention.
Solana’s Memecoin craze has cooled significantly. High-profile failure cases, such as tokens related to Argentine President Millay, have damaged market confidence and led to a sharp decline in trading volume on DEX platforms such as Raydium. Although Memecoin will not disappear and can be regarded as a digital collectible card, its craze peak may have passed and traders are starting to focus more on fundamentals rather than hype.
Bitcoin Layer 2 Side Chain
Bitcoin L2 and TVL of sidechains shrank 24.5% from $2.7 billion to $2.1 billion. Core led the way with TVL of $460 million (down 42.0%), followed by Bitlayer ($350 million) and BSquared ($320 million). BOB performed outstandingly, falling only 7.9% to US$220 million.
Data source: Footprint Analytics-Bitcoin Ecosystem Public Chain TVL
Among mid-sized platforms, Merlin performed better, with TVL falling slightly by 9.3% to $150 million. Small platforms faced greater pressure, with SatoshiVM down 31.5%, MAP Protocol down 29.6%, and Interlay down 27.4%.
Data source: Footprint Analytics-Bitcoin Ecosystem Public Chain TVL and Proportion
The downturn in the field is consistent with Stacks co-founder Muneeb Ali’s view at Consensus 2025:”As initial enthusiasm fades, more than two-thirds of existing Bitcoin Layer 2 projects will disappear within three years.” He predicts that the market will face severe challenges, and the industry downturn in February suggests consolidation may have begun. Looking to the future, platforms that can demonstrate practical effectiveness may be more durable than projects that are maintained solely by momentum.
Ethereum Layer2
Ethereum L2 TVL fell 23.4% to US$14 billion. Arbitrum maintained its lead with a TVL of $4.5 billion (down 33.4%), and Base climbed to second place with a TVL of $4.2 billion (down 10.6%), pushing Optimism ($2.1 billion) to third place. Polygon zkEVM surged 104.1% to US$300 million, becoming a rare highlight this month.
Data source: Footprint Analytics-Ethereum Layer 2 Overview (Bridge-related Indicators)
Base has introduced Flashblocks (faster transaction confirmations), Appchains (customized L3) and smart wallet sub-accounts to keep users sticky. Unichain launched its main network on February 16. Previously, its test network had processed a total of 95 million transactions and was positioned as a game rule changer to expand performance. Heavyweight institutions such as Circle have joined. Starknet’s Nums application chain, as a Layer 3 gaming innovation, demonstrates the future of modular design.
At the same time, although Sonic EVM is not Ethereum Layer 2, its Mobius main online launch on February 27 as Solana’s first SVM chain extension attracted a lot of attention, achieved 10,000 TPS, and brought US$47.6 million to Aave in a few days. These moves suggest that the Layer 2 project is doubling down on technology rather than just gimmicks.
Vitalik Buterin commented on February 19, emphasizing that Ethereum needs to clarify its position in the face of increasingly fierce competition. He pushed Layer 2 to take a leadership role in scalability (such as 17x transaction improvements) and interoperability, noting that they have evolved from “advanced multi-signatures” to powerful networks. Although he did not comment directly on Sonic EVM, its EVM compatibility and speed echo his vision for a seamless connection in the “Ethereum Universe”. However, he also expressed dissatisfaction with casino-like tendencies in the ecosystem, calling for a focus on real value rather than speculative bubbles.
financing situation
Financing activity slowed, with a total of 6 transactions completed in February, totaling US$32.4 million. Mango Network has raised $13.5 million for its EVM-MoveVM hybrid chain, which is scheduled to launch in the first quarter of 2025. Fluent Labs has received $8 million in funding to develop Layer 2, a multi-virtual machine that connects Ethereum and Solana.
Public chain financing event in February 2025 (data source:crypto-fundraising.info）
