Institutional investors have shifted their attention from Ethereum to competing layer-1 blockchains of late, with capital inflows for altcoin investment products increasing last week while Ether (ETH) products posted outflows for the third week in a row.
Data from CoinShares’ latest Digital Asset Fund Flows report shows that investors last week (ending on Friday) loaded up on $3.5 million worth of Avalanche (AVAX), Solana (SOL), Terra (LUNA) and Algorand (ALGO) funds while capital outflows from Ether products totaled $16.9 million.
It marks the third straight week that Ethereum products have seen outflows, bringing the total over that time to $59.3 million, equal to around 35% of the year-to-date outflows of $169 million from the second-largest blockchain.
Notably, investors also favored digital gold last week despite some recent hesitancy, with Bitcoin (BTC) products fetching $2.6 million worth of inflows.
Over the past 10 weeks, inflows to Ethereum products have reached only $68.5 million in what could signal a bearish trend by institutions towards the major blockchain.
Alternate layer-1 blockchains have been growing in popularity recently, and decentralized application (DApp) usage on Solana in the last seven days has increased, according to metrics from DappRadar. Usage for the decentralized exchange (DEX) Orca has grown nearly 43% over the week, and automated market maker (AMM) Raydium has seen a 15.5% increase, with volume in its app reaching over $1.5 billion.
While the metrics for Avalanche’s DApp usage haven’t increased over the week, the blockchains’ investments in incentive programs and millions spent luring developers to the platform have traders bullish on the future of AVAX.
Related: Does the future of DeFi still belong to the Ethereum blockchain?
The AVAX, SOL, LUNA and ALGO inflows were $1.8 million, $800,000, $700,000 and $200,000, respectively, while Bitcoin saw inflows equating to $2.6 million for the first time in two weeks. Analysts noted that month-to-date outflows for the largest crypto remain at $178 million.
Total outflows over the past three weeks have seen $219 million leave the market, with that number cooling last week winding down to just 7.2 million, a stark contrast to the $134 million which left the market in the first week of April.
Despite the recent run of outflows, the analysts note that year-to-date flows remain positive with $389 million coming into crypto assets since the start of the year.
The competition in Alt L1 has become fierce. Near has launched a DA solution and Sui’s TVL has been rising. Only Ethereum is still unhurriedly upgrading its main network. Two major competition points have emerged in L2: parallel EVM and decentralized sequencer.
JinseFinanceTechnology,zkEVM,Layer1,Vitalik: What will happen if ZK-EVM is packaged into Ethereum L1? Golden Finance, why not let ZK-EVM be used for rollup natively?
JinseFinanceThis is primarily done so that Terra Classic can compete with other blockchains.
OthersEthereum base layer TPS remains fixed. The scaling factor is around 2.6x according to L2beat.
BeincryptoSustainability can be simply defined as the protocol staying online, resilient to attacks, and usable under all conditions. It also needs to be relevant and keep up with contemporary needs, so to speak.
CointelegraphSince the coming to the fore of Bitcoin, the blockchain domain has mushroomed into a string of industry verticals from crypto to Metaverse to Web3 and a host of industry horizontals including DeFi, GameFi and SocialFi.
TristanThese discussions are fueled by the massive funding rounds of two new L1 unicorns, Aptos and Sui, with teams and structures drawn from Meta’s now-defunct Diem and Novi projects.
CointelegraphAlthough the airdrop took place less than two weeks ago, problems have already arisen for the vaunted layer-2 scaling solution’s team and market maker.
CointelegraphCoinShares analysis shows that Ethereum saw $17 million in outflows last week as investors favored smaller altcoins.
CointelegraphBTC price fell below $38,000 as tech stocks sold off and traders watched cautiously to see if Bitcoin can hold its “macro-level support” zone.
Cointelegraph