10 New Layer 1s to Prepare for the Next Bull Market

Written by: Azuma, Planet Daily

The crypto world is no stranger to cyclical patterns. Since the birth of Bitcoin, the industry has experienced multiple rounds of bull and bear markets, always managing to find new vitality amidst the ups and downs and chaos, evolving and growing alongside a series of new projects' "rise and fall."

In the last bull market, we witnessed a significant explosion in the Layer1 track. Against the backdrop of the Ethereum ecosystem's continuous value spillover, major Layer1s such as BSC, Solana, Avalanche, Fantom, Near, Harmony, and even Terra thrived, with infrastructure gradually maturing and various applications blossoming. As on-chain data surged, the market also welcomed a rediscovery of value.

Time has passed, and after months of downward pressure, most of the aforementioned Layer1 projects have retraced more than half of their gains. While it cannot be ruled out that these projects may continue to perform strongly in the next upward cycle (objectively, these Layer1s still possess considerable competitiveness), historical experience suggests that "the standout projects of each bull market often emerge from the previous bear market." At this moment, we may need to shift our focus to those newer Layer1s that started later and are still in the early stages of development.

There is a saying in the industry: "In a bear market, look at Layer1; in a bull market, look at Layer2." Considering the dynamics of the primary market, the new generation of Layer1s has become a new focal point for institutions. Star projects like Aptos and Sui have completed or are about to complete hundreds of millions of dollars in financing.

To help everyone better capture the latest development trends in the Layer1 track, we have selected 10 representative emerging Layer1 projects that have gradually entered the public eye over the past six months and have yet to issue tokens. In the following text, we will provide a brief introduction to these Layer1 projects from several dimensions, including basic information, core highlights, financing endorsements, and the latest developments.

It should be noted in advance that the projects mentioned below have been selected based on factors such as financing status, founding team background, and market heat. However, since these projects are generally in the early stages, we cannot guarantee that they will develop smoothly and successfully open up the market as expected, and thus this does not constitute investment advice.

Aptos: Perhaps the Strongest New Generation Layer1

In 2019, Facebook, along with dozens of institutions from within and outside the industry, launched the once-famous blockchain project Libra (later renamed Diem; for ease of reading, we will refer to it as Libra throughout this text). Although Libra ultimately met its demise due to regulatory pressures and other factors, a group of developers who once worked on Libra inherited some of the project's developmental fruits (such as the Move programming language) and created a series of new Layer1 projects through a more decentralized path.

Currently, the Layer1s with a Libra background that have been publicly showcased on social media include Aptos, Sui, Linera, and others, among which Aptos is temporarily leading in terms of financing scale, development progress, and the completeness of supporting infrastructure.

Aptos was born in February of this year when more than a dozen developers and researchers who previously worked at Libra came together to form Aptos Labs, announcing that they would redevelop the network based on some of Libra's existing technological foundations. Specifically, Aptos will still build on Libra's open-source codebase, using the Move programming language and MoveVM development environment, and will adopt the iterated Diem-BFT consensus. However, unlike Libra, which focused on cross-border payments, Aptos's vision is to improve the security and scalability of Layer1, creating an infrastructure network that can serve billions of people.

In mid-March, Aptos completed a strategic financing round of $200 million, led by a16z, with participation from numerous star institutions including Tiger Global, Katie Haun, Multicoin Capital, Three Arrows Capital, FTX Ventures, and Coinbase Ventures. Later that month, Aptos completed another round of financing; although specific details of this round have not been fully disclosed, it is confirmed that Binance Labs participated, and Aptos will closely collaborate with Binance in areas such as development, code review, infrastructure construction, and hackathons.

Currently, Aptos is conducting operational verification work for its second round of incentivized testnet and will airdrop 500 tokens as rewards to qualified validators who complete the testing (registration has ended).

As for ordinary users, Aptos can currently be accessed through terminal wallets like Martian and Fewcha, with recommended interactive projects including the domain service Aptos Name Service, decentralized exchange Liquidswap, and NFT marketplace Topaz, among others.

Sui: A New Unicorn Valued at $2 Billion

Last week, sources revealed that the development team Mysten Labs, formed by several former Libra project engineers, is seeking to raise at least $200 million in Series B financing at a valuation of $2 billion, with FTX Ventures leading the round. Investors have already committed at least $140 million in funding. Mysten Labs is the development team behind Sui.

As early as November last year, Mysten Labs completed a $36 million Series A financing round, led by a16z, with participation from Coinbase Ventures, NFX, Slow Ventures, Scribble Ventures, Samsung NEXT, and Lux Capital.

Similar to Aptos, Sui also inherits the Move programming language from Libra, but Sui has made certain improvements on the original version (Core Move), launching its own Sui Move version. This new version optimizes storage mechanisms, address types, and more while inheriting the security and flexibility of Move, thereby improving network performance and reducing transaction confirmation times.

Enhancing performance has always been a core focus for Sui. By classifying transaction types, Sui adopts completely different consensus mechanisms for independent transactions and dependent transactions, enabling transaction parallelization to significantly enhance network performance. According to Figment Capital partner Trace introduction, early data from running Sui nodes on a MacBook Pro shows that it can handle over 120,000 token transactions per second.

At the end of May, Mysten Labs announced Sui's token economic model and incentive-related content, with a total supply of 10 billion SUI tokens. A portion will be in circulation at the mainnet launch, while the remaining SUI will be unlocked or distributed in incentive activities over the coming years. Use cases for SUI include participating in PoS staking, paying gas fees, supporting the Sui economic system, and participating in on-chain voting, among others.

This week, Sui just released a Chrome extension wallet, Sui Wallet, for testing purposes. Additionally, Mysten Labs has previously announced that the Sui incentivized testnet will launch in August, so interested parties can start preparing.

Linera: Another Layer1 with a Libra Gang Background

Following Aptos and Sui, Linera is the third Libra background Layer1 to publicly announce the completion of financing.

On June 29, Linera announced the completion of a $6 million seed round, led by a16z, with participation from Cygni Capital, Kima Ventures, and Tribe Capital, among others. The funds raised will be used to hire developers and other staff to collaboratively build the protocol.

Compared to the other two projects, Linera has publicly emerged later, and the information disclosed so far is also more limited. Currently, the only reference source is an introductory article initially published by the official team.

In simple terms, Linera aims to build a low-latency blockchain that can scale as easily as web2 applications. To achieve this, Linera focuses on the FastPay protocol and Zef protocol, which were research priorities of its founder and CEO Mathieu Baudet during his time at Libra. Through these two protocols, theoretically, the blockchain can completely remove the memory pool and minimize interactions between validators, significantly speeding up simple operations like payments.

Linera's vision is to promote this method and make it practical, allowing most account-based operations to be confirmed quickly within fractions of a second.

Canto: New Ambitions for Stablecoins in the Cosmos Ecosystem

Although still in the testing phase, Canto has already attracted widespread market attention.

In terms of positioning, Canto is a Layer1 network built on the Cosmos SDK. However, unlike some other Layer1s, Canto comes with several DeFi functional components, such as a lending market forked from Compound, a DEX forked from Solidly, and a new stablecoin called NOTE.

In terms of composability, these three DeFi components complement each other. The issuance of NOTE does not directly follow a mint mechanism but requires over-collateralizing ETH, ATOM, CANTO, and other assets through the lending market. Its effective anchoring needs to be maintained through interest rate adjustments in the lending market and stablecoin incentive pools in the DEX. Conversely, NOTE will serve as the highest-priority stablecoin for lending and trading markets on the Canto chain (and even the entire Cosmos ecosystem).

After the UST collapse, the entire Cosmos ecosystem experienced a significant gap in the decentralized stablecoin market, and the emergence of NOTE can be seen as a partial filling of this gap. It is evident that NOTE's design has learned from UST's lessons to some extent, such as choosing over-collateralization and establishing a more direct support mechanism (minting becomes lending). If NOTE can successfully replicate UST's adoption expansion path, Canto as a Layer1 also has the potential to quickly open up the market along this expansion.

Gear: The Most Anticipated Smart Contract Chain in the Polkadot Ecosystem

Just as Canto exists in the Cosmos ecosystem, Gear is a highly anticipated Layer1 in the Polkadot ecosystem.

In December last year, Gear, a smart contract layer based on Polkadot, announced the completion of $12 million in financing, led by Blockchange, with participation from Three Arrows Capital, Lemniscap, Distributed Global, and Polkadot founder Gavin Wood, among others.

Gear is an advanced smart contract chain that supports WebAssembly (WASM). Once it successfully secures a parachain slot and connects, developers will be able to deploy their Dapps to Gear in the simplest and most efficient way within five minutes, thus entering the Polkadot ecosystem.

In terms of technical features, Gear includes but is not limited to the following points: first, it supports various programming languages such as Rust, C, C++, etc., which will significantly lower the entry barrier for developers who are not very familiar with blockchain, helping to bring more talent to the industry; second, when applications run in the browser, WebAssembly allows programs to execute at speeds close to native levels, which will improve the actual user experience; the third point concerns the interaction of smart contracts. Gear adopts the Actor model for communication, which is designed to be sharded and parallel, allowing developers to use different languages for asynchronous programming, improving the efficiency of asynchronous transaction processing, thus enabling various Dapps built on Gear to run at high speeds.

Celestia: A Layer1 That Celo Will Willingly Downgrade to "Supporting Role"

Celestia was formerly known as LazyLedger. While most readers may not be very familiar with these two names, you might recall the following two events.

One is when Polygon launched the general scalable data availability layer Avail last year, Celestia's co-founder Mustafa Al-Bassam tweeted that Avail's introduction almost verbatim copied his 2019 introduction to Celestia.

The second is in April of this year, when the Celo treasury organization Ocelot announced plans to change the public chain development roadmap, transforming its Layer1 architecture into a Layer2 Rollup on top of Celestia, using the Celestia network to achieve shared security and data availability, while no longer bearing the burdens of validators and consensus issues.

Celestia is a very unique Layer1, positioning itself as "the first modular blockchain network." Specifically, Celestia modularizes the technology stack of the blockchain network while decoupling the consensus layer from the execution layer. As a consensus layer, it will only handle transaction ordering and data availability verification, while the actual transaction execution will be distributed to other execution layer networks connected to Celestia (such as Celo).

In other words, Celestia adopts a multi-chain architecture of "consensus layer + execution layer" rather than a single-chain architecture, aiming to achieve scalability, flexibility, and interoperability that surpass traditional blockchain designs.

The roadmap indicates that Celestia plans to launch its testnet in 2022 and gradually start the incentivized testnet and mainnet in 2023. Its development team has also confirmed that it will issue tokens for PoS staking in the future.

However, objectively speaking, Celestia's architecture bears some resemblance to Polkadot's "relay chain + parachain," and the latter's multi-chain development path does not currently seem to be going as smoothly as desired. Therefore, whether Celestia can achieve its expectations upon launch remains to be seen.

Aleo: The Privacy Leader Refined Over Four Years

Strictly speaking, Aleo is not a new project; its founding team was established in 2019. After nearly two years of developing the underlying protocol framework, Aleo completed a $28 million Series A financing round in April 2021, led by a16z, with participation from Placeholder VC, Galaxy Digital, Variant Fund, Coinbase Ventures, Ethereal Ventures, Polychain Capital, Slow Ventures, Dekrypt Capital, Scalar Capital, Zero Knowledge Validator, and former Coinbase CTO Balaji Srinivasan.

In February of this year, Aleo completed a $200 million Series B financing round, led by SoftBank and Kora Management, with a16z continuing to invest, along with Tiger Global, Samsung Ventures, and others.

Aleo is positioned as a privacy-focused Layer1 that supports smart contracts, with its core technology centered around two main components: Zexe and Leo. The Zexe consensus protocol improves upon the existing zk-snarks technology from ZeroCash, enabling not only the encryption of simple token transfer transactions but also interactive transactions at the application level. Leo, as the programming language of the Aleo ecosystem, modularizes the zk-snarks settings of the Zexe consensus protocol, allowing any Dapp operating on the Aleo platform to utilize zk-snarks.

Notably, in the first quarter, Aleo partnered with blockchain gaming platform Forte (which raised over $900 million last year) to bring zero-knowledge proofs into blockchain gaming using Aleo's solutions.

Previously, Aleo completed two rounds of testnet testing, and the third round is currently being prepared. Once the third round of testing is completed, Aleo will enter the mainnet launch phase, at which point its tokens will also be released. Aleo has previously disclosed that its tokens will adopt a halving inflation model.

Anoma: A Privacy Network Supporting Free Exchange of Any Asset

Anoma is a privacy-focused PoS public chain strongly promoted by the well-known venture capital firm Polychain Capital.

In April last year, Anoma completed its first round of financing, raising $6.75 million, led by Polychain Capital, with participation from Electric Capital, Coinbase Ventures, FBG Capital, CMS Holdings, Lemniscap, Cygni Labs, and Walden Bridge Capital.

In November of the same year, Anoma raised another $26 million, with Polychain Capital continuing to lead the round, and Fifth Era, Maven Capital, Zola Capital, Electric Capital, and CMCC participating.

Anoma's two core concepts are "barter" and "privacy." The project aims to build a privacy payment system that serves everyone, thereby truly returning financial sovereignty to individuals.

The term "barter" refers to Anoma's goal of creating a network that allows any asset to serve as a means of exchange or payment, enabling individuals to choose any asset class in transactions. Notably, "any asset" refers to any tradable goods, services, or anything with intrinsic value that can be digitally represented, including assets created on Anoma, assets transferred to Anoma via interoperability protocols from other chains, and fiat currencies in stablecoin form.

"Privacy" is easier to understand. In Anoma, to protect user privacy and prevent others from tracing and collecting data, the sender, receiver, amount, and asset denomination are all encrypted, and zero-knowledge proofs are used to ensure the transfer of funds. Additionally, assets on the Anoma network will have a unified shielded pool shared among all assets during transfers, rather than each asset being shielded separately. This way, the more participants there are, the more assets there are, and the more frequent the transfers, significantly increasing the anonymity of asset transfer data.

Iron Fish: Aiming to Become the Privacy Layer of the Web3 World

The name "Iron Fish" comes from a cryptographic communication system built during World War II based on Native American languages, and the project aims to showcase the magical power of cryptography.

In November last year, Iron Fish announced the completion of a $27.7 million Series A financing round, led by a16z, with participation from Elad Gil, Sequoia Capital, Electric Capital, Dylan Field, Alan Howard, Jeff Weiner (LinkedIn Executive Chairman), MetaStable, A Capital, Divesh Makan (Iconiq), Do Kwon (Terra), Matt Luongo (Keep Network), Nathan McCauley (Anchorage), and Arrington XRP, among others.

Iron Fish is positioned as a Layer1 privacy network that employs PoW consensus while using zk-SNARKs and the Sapling protocol to provide the highest level of privacy protection for every on-chain transaction. The standout feature of Iron Fish is that the network aims to protect privacy without compromising the accessibility of on-chain transactions. To achieve this, Iron Fish provides each on-chain address with an additional "view key," allowing address holders to grant others read-only access through this key.

This mechanism effectively addresses the regulatory challenges faced by privacy-focused Layer1s. Through the "view key," Iron Fish will allow relevant institutions to view detailed information about the corresponding address in a read-only state, thereby complying with necessary anti-money laundering (AML) obligations.

Currently, Iron Fish is still in the second round of incentivized testnet phase, which will continue until the nodes are stable, features are complete, and all preparations for the mainnet launch are ready.

According to the plan, Iron Fish will eventually establish cross-chain bridges with other mainstream blockchains to provide privacy protection for other mainstream assets, gradually realizing its ultimate vision—becoming the privacy shield layer for the entire Web3 world.

Monad: The Expansion Ideal of Jump's Former "Brain"

In mid-April (when Jump had not yet been severely impacted by Terra), Keone Hon, the head of research at Jump Trading, announced his departure to establish Monad. His vision is to build a high-performance blockchain compatible with EVM, aiming to unleash the potential of the EVM ecosystem by significantly improving the execution efficiency of EVM. According to Keone, Monad's performance is expected to exceed Ethereum's by over 1000 times and can support more complex application types, thereby achieving broader adoption.

Monad believes that thanks to Ethereum's extensive user education, EVM has almost become a "standard" choice in the web2 world, but the current scaling paths taken by Ethereum, whether sharding or rollups, create independent execution environments that disrupt composability on-chain. Therefore, a higher-performance underlying network needs to be constructed.

In the currently available materials from Monad, while it emphasizes that Layer1 needs to achieve higher TPS to meet the innovative demands of applications, it does not explicitly mention how Monad will achieve a qualitative leap in TPS. However, from the few descriptions available on the official website, it is likely that Monad will focus its scaling efforts on low-latency programming, compiler optimization, and multi-threaded computing.

A New Era, New Challenges

With each cycle, a batch of projects with distinct characteristics of the era emerges. Looking at the projects mentioned above, we can see that the new generation of Layer1s continues to pursue the overarching theme of "scalability" while actively responding to other themes such as "privacy," "composability," and "richness of applications."

Although each project has its own design philosophy, technical framework, and unique features, all projects are attempting to respond to the demands of the era in their own way, from innovations in programming languages to the reconstruction of transaction processing logic to considerations of on-chain functionalities. We can see that the new generation of Layer1s is becoming the new blood of this industry.

However, this does not mean that the path ahead is smooth. Horizontally, the new generation of Layer1s not only faces competition from contemporaneous rivals but also needs to directly challenge the "old" Layer1s that have already made significant strides and the gradually improving Layer2s. Vertically, as Web3 continues to land and evolve, the new era's applications will undoubtedly impose higher and more complex requirements on the new generation of Layer1s.

What lies ahead for Aptos, Sui, and others is a more severe competitive environment than their predecessors.