The current Layer 1 (L1) landscape reveals stark contrasts: SOL's meteoric rise, TON's dazzling performance, TRX's steady growth, and ETH's surprising weakness. Since early 2023, ETH/BTC rates have consistently declined, raising critical questions: Why is ETH underperforming? Is it severely undervalued?
To answer these, let’s examine key financial metrics—fee revenues—across these chains.
📊 Comparative Fee Revenue Analysis
Ethereum (ETH)
- Trend: Annual revenue stagnated, peaking at $600M in March 2024 (vs. $1.8B during 2021’s bull run).
- Implications: ETH’s price weakness correlates with declining on-chain activity. As altcoin markets retracted, so did ETH’s revenue.
Solana (SOL)
- Growth Surge: Revenue climbed steadily from October 2023, fueled by meme coin mania in March 2024 ($200M monthly revenue).
- Result: SOL’s price surged from $20 to $200+, stabilizing post-rally due to sustained revenue (~$20M/month).
Tron (TRX)
- Consistency: Maintained $100M/month revenue, driven by dominance in USDT transactions (>50% market share).
- Outcome: TRX’s price resilience—nearing all-time highs—reflects robust demand for its RWA (Real-World Asset) utility.
TON
- Breakthrough: Fee revenue skyrocketed from November 2023, coinciding with TON’s price leap ($2 → $8).
- Stability: Post-surge, revenue stabilized, supporting TON’s price at $6.8 despite market downturns.
🔍 Valuation Metrics: Price-to-Earnings (PE) Ratios
Using PE = Market Cap / Annualized Fee Revenue, we assess relative valuations:
| Chain | Market Cap ($B) | Annualized Revenue ($B) | PE Ratio |
|--------|-----------------|-------------------------|-----------|
| ETH | 408.9 | 0.28 | 145.7 |
| SOL | 84.6 | 0.025 | 338.9 |
| TRX | 12.0 | 1.56 | 7.7 |
| TON | 9.8 | 0.015 | 671.2 |
Key Takeaways:
- High-Growth Premium: SOL and TON’s exorbitant PEs reflect market optimism about their future scalability (e.g., SOL’s meme coin traction, TON’s Telegram integration).
- ETH’s Undervaluation? Despite lower PE vs. peers, ETH’s stagnation in revenue growth dampens price momentum.
- TRX’s Anomaly: PE ~8 aligns with DeFi app valuations (not L1s), as TRX thrives on USDT utility—not ecosystem diversity.
🚀 Growth vs. Sustainability: Critical Risks
Solana’s Challenge
- Dependence on Meme Coins: Short-term hype risks volatility if speculative activity fades.
- Innovation Gap: Needs sustainable use cases beyond token launches.
TON’s Ceiling
- Telegram’s User Base: Growth hinges on converting existing users—a finite pool.
- Scalability: Must prove long-term viability as adoption plateaus.
Ethereum’s Crossroads
- Innovation Debt: ETH’s strength—its developer community—must deliver next-gen breakthroughs (e.g., modular blockchains, L2 solutions).
- ETF Impact: Institutional inflows could reignite momentum, but ecosystem revival remains pivotal.
👉 Discover how L1 chains are evolving
📌 FAQs
Q1: Why is ETH’s PE lower than SOL’s despite its dominance?
A: Markets price growth potential. SOL’s revenue surge (albeit smaller) signals scalability, while ETH’s flat growth dampens optimism.
Q2: Is TRX undervalued as an L1?
A: TRX is priced as a utility token (USDT platform), not a full L1. Its low PE mirrors DeFi apps, not infrastructure plays.
Q3: Can TON sustain its high valuation?
A: Only if it diversifies beyond Telegram’s ecosystem and attracts independent developers.
Q4: What could trigger ETH’s resurgence?
A: A new wave of killer apps (e.g., tokenized RWA, advanced DeFi) or L2 adoption driving fee revenue growth.
👉 Explore L1 investment strategies
🔮 Conclusion: Strategic Outlook
- SOL & TON: High-risk, high-reward bets on speculative growth. Monitor ecosystem diversification.
- TRX: Steady but capped by its niche utility. Ideal for conservative investors.
- ETH: A sleeping giant—undervalued if innovation rebounds. Watch for L2 developments and ETF-driven liquidity.
The L1 race is far from over. Capital favors agility, but endurance defines long-term winners.