OAK Research indicates that in 2025, undifferentiated Layer 1 and Layer 2 tokens faced significant challenges as users shifted their focus, with Monthly Active Users (MAUs) dropping by 25%, while revenue remained largely in stablecoins, with developer activity remaining robust.
Summary
- OAK Research highlights that major Layer 1 tokens experienced notable declines in 2025, even as Bitcoin demonstrated relative stability, revealing weaknesses in tokenomics and value capture mechanisms.
- There was a 25.15% decrease in Monthly Active Users across leading chains, with Solana witnessing almost a 60% drop, while BNB Chain nearly tripled its user base; most Layer 2 tokens also ended the year lower.
- Despite strong developer numbers on EVM, Bitcoin, and Solana platforms, revenues predominantly flowed to stablecoin issuers and derivatives, putting generic infrastructure tokens under pressure as 2026 approaches.
According to an end-of-year report by OAK Research, significant declines were observed in Layer 1 blockchain tokens in 2025, with major assets losing considerable value despite continuous developer engagement.
Even though Bitcoin (BTC) maintained relative stability throughout the year, alternative Layer 1 tokens suffered steep losses, underscoring structural issues in tokenomics and positioning, as per the report. The findings indicated a shift from speculation to a focus on fundamental value creation, with protocols lacking demonstrable economic activity facing increased selling pressure.
The year was marked by significant user reallocation rather than total growth, with a reported 25.15% decline in total Monthly Active Users across significant chains, based on the report’s blockchain metrics analysis. Solana (SOL) experienced the most significant drop, losing nearly 94 million users, translating to a more than 60% decrease, while BNB Chain nearly tripled its user base.
Layer 2 networks exhibited similar trends. Base showed the strongest growth in Total Value Locked (TVL), benefiting from Coinbase’s distribution network. Conversely, Optimism experienced a contraction in TVL as capital shifted to competitors.
Most major Layer 1 tokens concluded the year with losses, while Layer 2 tokens also faced declines despite technological advancements. The report highlighted significant downturns for Optimism and zkSync Era, while Polygon and Arbitrum also saw substantial reductions. Conversely, Mantle posted a slight gain, attributed to concentrated supply management.
The report pinpointed three core factors contributing to the declines: overleveraged tokenomics with continuous unlock schedules; absence of value-capture mechanisms linking network use to token demand; and a marked preference from institutions for Bitcoin and Ethereum over smaller-cap options.
Despite price drops, developer activity remained robust across select ecosystems, as data from Electric Capital noted in the report. The EVM stack continued to host the largest developer community, boasting thousands of contributors. Bitcoin recorded the highest two-year growth in full-time developers among major ecosystems, while Solana and the broader SVM stack also realized substantial growth over two years.
The gap between developer engagement and token prices pointed to market maturation, as the report mentioned. Development teams remained active during downturns, but capital shifted away from infrastructure without clear paths to revenue generation.
Protocols lacking revenue streams faced increased risk, according to the report. Stablecoin issuers led revenue generation, with Tether and Circle combining for significant annual earnings while derivatives platforms contributed income through sustainable fee structures.
Layer 1 and Infrastructure
Generic Layer 1 and Layer 2 networks with little differentiation struggled in the competitive landscape, as the report indicated. These networks needed substantial enhancements in speed, cost, or security to justify their independent existence.
Infrastructure tokens are expected to face ongoing pressure heading into 2026, despite gaining regulatory clarity in key markets. The combination of high inflation schedules, insufficient demand for governance rights, and a concentration of value capture in foundational layers suggests further consolidation may be on the horizon.
While protocols generating meaningful revenue may achieve some stability, they remain vulnerable to broader market fluctuations and pressure from early investors, as stated by OAK Research. The report concluded that the future of existing Layer 1 tokens hinges on leadership from major platforms and renewed institutional engagement.
