The battle between ecology and products: Who will dominate the blockchain industry in 2025?

Article author: Charlie.hl Article translation: Block unicorn

The battle of 2025 will be a battle of choice for the next generation of blockchains, which will choose to prioritize ecosystem or product. Which priority will create the most successful blockchain (measured by market capitalization, fees generated, and number of unique users)? This question is playing out in real time, and future top-level layer 1 (L1) and layer 2 (L2) chains are betting their fate on opposing strategies. On one side are ecosystem-first chains represented by Monad, MegaETH, and Berachain, and on the other side are product-first chains represented by Hyperliquid. In this article, I will dive into this distinction and these opposing chain philosophies that will shape the blockchain development landscape in 2025.

The Competitors: Ecosystem First

Monad, MegaETH, and Berachain are the main proponents of the ecosystem-first philosophy, which aims to build a thriving network of interdependent applications and stakeholders before focusing on building individual products. These chains attempt to attract developers to move from existing chains and each other by providing developer spaces, grants, and more chain-specific developer benefits such as growth or partner support.  

Over the past year or so, Monad’s BD/Growth team like @intern and @internbrah has brought a lot of attention to Monad, attracting hundreds of thousands of Discord members and Twitter followers, and many Monad-based projects have raised funds at high valuations as they claim the promise of being the first and dominant [insert DeFi primitive] on Monad. As Monad’s business outreach strives to win top project builders from its competing chains, the phrase “build on Monad” is echoing across the crypto Twitter timeline. Monad even has a @monad_eco page to make the point even more explicit: ecosystem is the priority. MegaETH’s approach to ecosystem building is slightly different, but its priorities are equally clear. The chain’s Labs team plays a uniquely interventionist role in its ecosystem. Rather than trying to convince existing projects to launch on its chain, they focus primarily on nurturing grassroots projects from its accelerator, MegaMafia. These applications are tailor-made for MegaETH and unique to its ecosystem, but don’t necessarily have the reputation and visibility of existing DeFi projects. Rather than waiting for natural development, MegaETH proactively “shaped” several core projects: perpetual contract DEX, spot DEX, lending protocol, etc. This carefully curated approach is designed to ensure ecosystem coherence and interconnectedness, with MegaETH betting that these early investments will lead to growth as more teams come on board. For MegaETH, the MegaMafia ecosystem and its success are paramount.

Then there is Berachain, which seeks to combine ecosystem innovation with technological innovation. Its unique Proof of Liquidity (PoL) consensus mechanism incentivizes the provision of liquidity for Berachain native applications such as BEX (Bera native decentralized exchange) and BEND (Bera native lending protocol). By embedding liquidity incentives into the core architecture of the chain, Berachain hopes to create a virtuous cycle of ecosystem growth associated with its infrastructure. Here, the product itself is the growth of the ecosystem, which can also be seen in early initiatives such as Boyco. For the Berachain team, winning the competition for the ecosystem is a top priority.

Each of these chains has made ecosystem development the foundation of growth, and while their products are far from empty talk, it is clear that in the early stages, their focus is on the network itself.

The Opposite: Product First

In stark contrast, Hyperliquid has turned the ecosystem-first philosophy on its head. Rather than rallying developers to build on its L1, Hyperliquid has focused on delivering a killer product: the most successful perpetual swaps decentralized exchange (perps DEX) in the history of crypto. Only after solidifying its position in the perps space did Hyperliquid begin rolling out its L1, aiming to enhance its flagship product and offer a network tailored for traders.  

Hyperliquid’s strategy represents a fundamental shift in L1 launch strategy. Rather than catering to app developers, it focuses on end users — in this case, traders. The idea is pretty simple: if you build a product that users love, developers and apps will naturally follow liquidity and activity. This strategy avoids the pitfall of over-hyping an ecosystem without a proven product.

This focus has led many to question where the Hyperliquid ecosystem is, as the Labs team is apparently not making an open call for developers or apps at this time. Instead, Hyperliquid’s Labs entity remains focused on product direction, seemingly taking the approach of letting apps follow liquidity and users rather than the other way around.

Philosophical Difference

At its core, the ecosystem vs. product debate reflects a philosophical divide in blockchain development. The ecosystem-first approach relies on developer network effects: by fostering a thriving community of developers and projects, it aims to create a self-sustaining growth loop. The product-first approach flips this logic on its head, betting that a great product will first attract users and liquidity, and the ecosystem will naturally follow. The market will ultimately decide which strategy prevails. If ecosystem-first projects like Monad, MegaETH, and Berachain can translate their community momentum into lasting adoption, they could define the direction in which L1/L2 ecosystems evolve. Conversely, if Hyperliquid continues to win users by focusing on providing the best trading experience, it could force the industry to rethink how a successful launch strategy is defined. By putting product first, Hyperliquid is essentially putting community first, as great products lead to widespread usage, which leads to more valuable community ownership, which could create the ultimate flywheel of adoption in 2025. This is mostly objective analysis, but I’d wager that when we look back at this article in December 2025, Hyperliquid will be leading by a wide margin in all three of the above metrics.   

As we head into 2025, one thing is certain: the battle between ecosystems and products will shape the landscape of L1/L2 development in the year ahead.