In the ever-evolving globe of cryptocurrencies and blockchain technology, the race to establish a highly scalable, convenient network capable of being adopted on a global scale is a never-catastrophe marathon where new competitors regularly join in on the race.

Bitcoin is undoubtedly the marketplace leader when it comes to network security, active users and market capitalization value, while Ethereum has thus far established itself as the top smart contracts platform, but the connected difficulty in getting these networks to calibration has opened the door for next-generation blockchain protocols to gain a foothold in the market place.

The tenuous nature of Ethereum's reign has begun to come up under increased pressure in contempo months every bit several upwardly-and-coming layer-one- and layer-two-based protocols accept launched incentive programs to attract liquidity and users to their ecosystems.

Hither'southward a wait at some of the ascent layer-one smart contract platforms that are vying for an increased share of liquidity in the crypto market.

Fantom incentivizes developers to migrate

Fantom is a protocol that utilizes a directed acyclic graph compages to perform its consensus and is, in theory, infinitely scalable based on this design.

The high-speed, low-cost nature of the network has been gaining increased attention from participants in the crypto community in recent months considering the Ethereum network continues to suffer from high transaction costs and slower confirmation times due to network congestion.

Activity on the network really began to increase following the Aug. thirty announcement of a 370-one thousand thousand-FTM incentive program aimed at rewarding developers who build new protocols on the Fantom network.

In the time since the launch of the FTM incentive program, the total value locked (TVL) on the Fantom protocol has increased from $691 million to a new record high at $i.44 billion on Sept. ix, based on data from Defi Llama.

Total value locked on Fantom. Source: Defi Llama

According to data provided past the Fantom Foundation, a TVL of $1.44 billion makes Fantom the fourth-largest Ethereum Virtual Automobile (EVM)-compatible network on the market and is currently adding more than 20,000 new addresses and processing over 1.5 million transactions on a daily basis.

Multiple new nonfungible token (NFT) and decentralized finance (DeFi) protocols are launching on the network, and it'south possible that this trend will continue to rise as liquidity migrates to Fantom.

Liquidity "rushes" to Avalanche

Some other network that has been draining liquidity from the Ethereun network is Barrage, an open up, programmable smart contracts platform specifically designed for decentralized applications.

Activeness for the protocol saw a significant uptick post-obit the launch of the Avalanche Rush DeFi Incentive Plan on Aug. 18, which dedicated $180 million to DeFi protocols and liquidity to the Avalanche ecosystem.

The program initially integrated with Curve and Aave, two of the top DeFi protocols on the Ethereum network, but has since expanded to include other protocols, such every bit SushiSwap, Benqi Finance, YAY Games, Kyber Network and ParaSwap.

Following the launch of the incentive program, information from Defi Llama shows that the total value locked on the Avalanche protocol surged from $311.5 million on Aug. 18 to an all-time high at $ii.42 billion on Sept. 5 before a market-wide pullback dropped its value to $two.11 billion at the time of writing.

Total value locked on Avalanche. Source: Defi Llama

Barrage has also seen a number of new DeFi and NFT protocols launch on the network, including a partnership with the collectible and trading carte du jour maker Topps, which launched its "2021 Topps Major League Baseball game Inception NFT Drove" on the Avalanche network.

The ongoing migration was fabricated possible by the launch of the Avalanche Bridge in June, and this enabled users to transfer any asset on the Ethereum network to Avalanche at a fifth of the toll previously required through the bridge.

Related: As Bitcoin debuts in Republic of el salvador, Honduras and Republic of guatemala report CBDCs

A competitive field gets fifty-fifty more crowded

Fantom and Avalanche are 2 of the more recent rising stars in the layer-1 game that have been siphoning users from the Ethereum network, but they are far from alone.

Other EVM-compatible networks that made headway earlier in the year are the Binance Smart Chain and Polygon. Both networks let users to keep their assets on the Ethereum network while avoiding the high fees on the base layer.

Top vii blockchain protocols by total value locked. Source: Defi Llama

The biggest threat posed to Ethereum from a non-EVM-compatible chain comes from Solana, which has seen the biggest gain in TVL over the past seven days, followed by the stablecoin-focused protocol Terra.

2 terminal notable mentions include the cocky-amending blockchain protocol Tezos and Algorand, which is a pure proof-of-stake protocol.

Data from Defi Llama shows that each network'due south TVL increased by 207% and 71%, respectively, over the past seven days, while their token prices spiked shut to their all-time highs cheers to protocol upgrades and, in the instance of Algorand, adoption by the government of Republic of el salvador.

As mentioned at the outset and shown in the TVL figure above, the Ethereum network is the dominant smart contract blockchain in terms of users, protocols and TVL, merely the current limitations of the network take left the door open up for competitors to chip away at its market share.

It remains to be seen whether Ethereum 2.0 will solve the bug faced or if a adjacent-generation protocol will ascension to the top and offering the optimal solution to the blockchain trilemma of providing decentralization, security and scalability on one easy-to-use platform.

Want more information about trading and investing in crypto markets?

  • Which stablecoins were actually 'stable' during this calendar week's sudden Bitcoin price crash?
  • Cointelegraph Research: Is Solana an 'Ethereum killer?'
  • VORTECS™ Spotlight: Fantom'south 500%+ rally was signaled by this central trading metric
  • Staking volition swallow proof-of-work for breakfast — Here's why
  • Surge in activeness and token prices show 'DeFi Summer ii.0' already started

The views and opinions expressed here are solely those of the author and practice not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you lot should behave your ain research when making a decision.