February 2025 Public Chain Research Report

In February 2025, the blockchain market experienced a significant market adjustment, posing challenges to both established networks and emerging public chains.

February saw a significant market adjustment as several major chains faced difficulties. Bitcoin showed strength with a smaller decline, and its dominance increased. Among the top chains, Solana was hit the hardest, with a price drop of 36.3% and a smaller decrease in market share. Credit Suisse's report highlighted the market downturn, especially in the DeFi sector, which saw a 20% decline in TVL.

On the bright side, Berachain rapidly entered the top six with a TVL of $3.2 billion after launching its mainnet on February 6. The chain issued 80 million BERA tokens and adopted a "proof of liquidity" model, an innovative staking method that converts liquidity into network security. Following a $100 million funding round in 2024, this month's airdrop and governance incentives fueled market enthusiasm.

On the bright side, Berachain rapidly entered the top six with a TVL of $3.2 billion after launching its mainnet on February 6. The chain issued 80 million BERA tokens and adopted a "proof of liquidity" model, an innovative staking method that converts liquidity into network security. Following a $100 million funding round in 2024, this month's airdrop and governance incentives fueled market enthusiasm.

In contrast to the sluggishness of Layer 1 chains, activity in Layer 2 was brisk. Base launched Flashblocks (faster transaction confirmations), Appchains (custom L3), and smart wallet subaccounts to maintain user stickiness. Unichain launched its mainnet on February 16, having processed 95 million transactions in its testnet, positioning it as a game changer in scalability performance, with heavyweight institutions like Circle joining. Starknet Nums application chain, as a Layer 3 gaming innovation, showcases the future of modular design.

In contrast to the sluggishness of Layer 1 chains, activity in Layer 2 was brisk. Base launched Flashblocks (faster transaction confirmations), Appchains (custom L3), and smart wallet subaccounts to maintain user stickiness. Unichain launched its mainnet on February 16, having processed 95 million transactions in its testnet, positioning it as a game changer in scalability performance, with heavyweight institutions like Circle joining. Starknet Nums application chain, as a Layer 3 gaming innovation, showcases the future of modular design.

However, despite the efforts of several projects, the overall market adjustment was undeniable. As institutions encountered difficulties and sold their holdings, selling pressure mounted, especially in the last week of February as ByBit's hacking incident unfolded, setting a record for the largest loss at $1.5 billion. This triggered widespread panic and rapid shifts in market sentiment.

With the Trump administration's executive order on cryptocurrencies focusing on self-custody and stablecoin development, there was an unusual level of clarity in U.S. policy. Moreover, the SEC appeared to soften its stance, pausing investigations into companies like Coinbase, Binance, and Uniswap, and dropping its appeal against the "dealer rule." Furthermore, the bipartisan GENIUS Act (the U.S. Stablecoin National Innovation and Establishment Act) advanced, suggesting a more favorable trend in the U.S. regulatory environment.

This shift in regulatory attitude was noticed by institutions. Credit Suisse noted in its report that institutions were net sellers in January, but their selling activity is expected to slow down in the coming months. The report also highlighted the market downturn, especially in the DeFi sector, which saw a 20% decline in TVL.

In the realm of Memecoins, Argentine President Milei's tokens quickly lost momentum as the bullish market fizzled out. The narrative shifted from frantic buying to frantic selling, with institutions offloading their positions. This move was largely anticipated due to the massive price rallies that institutions typically spark during the initial accumulation phase. As selling pressure increased, the tokens faced steeper declines, and trading volume dropped significantly.

In the realm of Memecoins, Argentine President Milei's tokens quickly lost momentum as the bullish market fizzled out. The narrative shifted from frantic buying to frantic selling, with institutions offloading their positions. This move was largely anticipated due to the massive price rallies that institutions typically spark during the initial accumulation phase. As selling pressure increased, the tokens faced steeper declines, and trading volume dropped significantly.

While the Memecoin craze is unlikely to disappear entirely—it can be viewed as a collectible card aspect of Web3—the peak frenzy may have passed in February, with traders shifting focus to fundamentals over speculation.