Reasons For Layer 1 Blockchains’ High Transaction Volume In November
Spike In L1s’ Transaction Volume
The prominent crypto journalist Colin Wu, citing data from the digital asset aggregation platform DeFiLlama, revealed that transaction volumes on several Layer-1 blockchains increased significantly in November. According to Wu, Avalanche, a blockchain that competes with Ethereum in speed and scalability, saw its transaction volume spike by 167% in November to $2.73 billion.
The recent milestone was Avalanche’s highest monthly increase since July 2022. The impressive growth in transaction volume at Avalanche demonstrates the platform’s new capability to handle many transactions quickly and efficiently.
In addition, Avalanche-X, the blockchain’s unique consensus mechanism, allows it to process transactions in parallel, significantly reducing transaction processing time. The success of Avalanche is also due to its emphasis on interoperability.
The blockchain is designed to interact with other protocols, making it easier for developers to create decentralized applications that communicate with multiple blockchains. Wu also highlighted a 113% increase in Osmosis’ transaction volume, which recently surged to $490 million.
Notably, Solana (known for hosting scalable apps), ThorChain (an independent blockchain that leverages the Cosmos SDK), and Sui (known for its fast transaction processing time) reached unprecedented highs.
Layer-1 Protocols Sees Price Surge
With the increase in the transaction volume of Layer-1 blockchains, the values of their native tokens are also on the rise. According to TradingView data, the value of AVAX, the native cryptocurrency of Avalanche, rose from $11.33 on November 1 to a monthly high of $24.68 on November 17.
However, it experienced a slight pullback and ended the month at $21.39, representing a 90% monthly gain. Similarly, OSMO, Osmosis’ native asset, increased by 130% in November, from $0.3584 at the start of the month to $0.8250 as of November 18.
OSMO finished the month at $0.7053, a 14.5% retracement. Analysts opined that the growing adoption of decentralized finance (DeFi) protocols is the cause of the increase in transaction volume of these Layer-1 blockchains.
These protocols enable users to gain access to financial services without intermediary platforms. Hence, the upsurge in transaction volume reflects the growing popularity of DeFi protocols.
On-chain data shows that AVAX and OSMO are two of the market’s most promising Layer-1 blockchains. AVAX is well-known for its fast transaction speeds and low transaction fees, while OSMO is known for its unique blockchain interoperability features
SOL And Other L1 Tokens Record Gains
Solana’s SOL token made a substantial profit in November. According to TradingView data, the token was trading at $38.42 on November 1 and rose to $68.18 by November 16. However, the price of SOL retraced from its monthly high and closed the month at $59.29, representing a 53.83% monthly gain.
During the same period, ThorChain’s RUNE increased by more than 120%, while SUI increased by 35.5%. SOL token has been doing well in the market, with a 20% increase on November 10, breaking through the $54 mark for the first time since May 2022.
Meanwhile, SUI Foundation’s native token was on a double-digit bull run last month, with exponential growth fueled by the emergence of new decentralized applications on the network.
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