Layer 1 Tokens Is Dying, What Should Investors Do?

How are the layer 1 coins that were once bright stars in the uptrend seasons of 2021? Is there still potential to invest money? Or are only the remains of coins that once had a glorious past? Let's review and review the coins that were pieces of previous uptrend seasons in this analysis with Holdstation!

What is Layer 1?

Before reviewing the layer 1 faces with a bright past in the previous uptrend color, let's review what the definition of Layer 1 is!

For those new to the market who don't know what layer1 is, layer 1 is a name for a Blockchain platform. Platforms like BTC (Bitcoin), ETH (Ethereum), SOL (Solana) are all Layer 1. They are called Layer 1 because it is the main network in its ecosystem. In contrast to Layer 1. In other words, a Layer 1 platform is when it processes and completes transactions on its own blockchain. It also has a native token that is used as a transaction fee.

The layer 1 coins had a bright past

NEAR PROTOCOL

Near Protocol is a blockchain that operates under Public Proof of Stake and Sharded mechanism. It's like a community-run cloud platform, introduced as highly scalable and low-cost for developers to create decentralized applications easily.

However, in fact, during the actual run, Near encountered a lot of operational errors related to network congestion or stuttering or lag. The transaction speed on the network is also not as fast as in the project's introduction. Besides, it seems that Near's technology is difficult to access and not attractive enough for large investors to develop and build dapps on Near's ecosystem.

Observing onchain data, users can see that although the number of new wallets created by Near is still growing extremely strongly. However, when looking at Near's trading volume, it is extremely disappointing when in its heyday, Near's trading volume once reached $ 3.21 billion, at the present time daily trading volume. Near's share has split about 12-15 times when it reached less than $ 100 million on October 1. Or the total key value (TVL) of Near has not had any growth in the last 3 months. These figures have shown that the number of newly opened Near wallets is still growing steadily but maybe these are just numbers from dapps on Near's ecosystem or there is a very high chance that these wallets are just wallets. bot that Near's team created to show users that the ecosystem and project are still working and growing. The price of $NEAR has also split almost 10 times from the $20 peak in January 2022. At the time of writing the price of $NEAR is trading at $3.6.

In the author's personal opinion, Near has in general all the strengths of a complete layer 1 blockchain ecosystem. However, Near's team must really make a bigger effort when Near's competitors at the moment are not only many but also extremely potential. The price of Near in the future is certain that if BTC goes up then $NEAR will still increase. However, to rise sharply and regain the old peak of the past will be an extremely arduous and difficult journey. For investors who are holding $NEAR in a bad price zone, they can consider switching and looking for other more potential and desirable opportunities.

CELO

Celo is a Mobile Blockchain, or open platform that makes it possible for anyone with a phone to access financial services, send money to the recipient's phone number, and make payments using the phone number like  public key.

Thinking about Celo's operating model on mobile has created a path, a potential development direction for the project. However, until now, it seems that the achievements that Celo have achieved have not been as expected of the majority of the user community.

When looking at the project's onchain data, it's similar to Near although the number of Celo users since the beginning of 2022 has been quite impressive growth numbers. However, the cash flow into Celo seems to be absent, as the project's TVL has been around the $100-200 million mark since mid-May and hasn't seen any significant changes. The project's current daily trading volume is only approximately $100 million, down about 13 times from its peak in 2021.

Besides, the image of Celo's ecosystem is not complete, not even equal to Near Protocol. Some examples can be mentioned such as the defi array of the ecosystem, the leading dex exchange Ube of the Celo ecosystem currently only has a TVL of about 5.17 million USD, a number that is too small compared to others. dex files like Uni ($5.2 billion) or Pancake (nearly $3 billion) of layers 1 Ethereum or Bnb.

The current price of $CELO has also divided approximately 10-12 times since its peak in 2021. Currently $CELO is trading around $0.77.

In my opinion, up to now, Celo's ecosystem has not had enough pieces to create an ecosystem that is considered large and complete, the next uptrend season with With a series of potential new layer 1s like Aptos or Sui with great interest coming not only from tier1 VCs but also from the community, it's very difficult for the cash flow to return to old faces like Celo. Therefore, investors who are holding $CELO at a price that is not too beautiful, can consider cutloss and hold money to wait for new trends or more potential opportunities in the coming period.

POLKADOT

Polkadot (DOT) is a multi-Chain, heterogeneous, and scalable blockchain network technology. Polkadot allows blockchains to connect with each other to share data and form a decentralized network.

To put it simply, Polkadot is a blockchain of many blockchains. This project will help users to build their own blockchain on Polkadot system easily.

In 2021 Polkadot has emerged like a hurricane, Polkadot's parachain auction event has attracted millions of users around the world. The prices of most coins on Polkadot's parachain are poles. The project has raised hundreds of millions of dollars through this hugely popular event.

But at the moment, silence has enveloped Polkadot when the trading volume of $DOT only reaches 100-200 million dollars per day. This figure at Polkadot's peak was more than 10 billion dollars. The current price of 1 DOT has also split nearly 10 times since the peak in 2021.

Besides, on August 14, Acala, the largest liquidity pool on Polkadot, was hacked by hackers by printing more than 1.2 billion aUSD. This incident caused the stablecoin aUSD to lose its peg severely. This same event caused the price of $DOT to plummet.

However, Polkadot is the leading coin in the web3 trend, and the parachains on Polkadot have also completed their form. The writer's personal opinion is that if anyone is holding $DOT at a price that is not too high, they can continue to hold and wait for the uptrend season to return. Because when the uptrend returns, the web3 trend is very likely to be pulled, Polkadot is the pioneer flag for this promising trend. Polkadot's parachain auctions are around mid-2021, auction participants will have their $DOT locked for 2 years, that is, it will not be until mid-2023 for a large amount of $DOT will be unlocked.

So investors holding $DOT do not need to worry too much. Even with BTC being sideways at the moment, the current $6 price zone of $DOT is also a pretty potential price zone.

SOLANA

Solana is known as the world's first web-scale blockchain, a blockchain solution that allows scalability and transaction speeds of up to 65,000 TPS and 400ms block time, but is said to be free of trade-offs. reduce security or lose decentralization. Creating decentralized applications (DApps) will become easier with the Solana protocol.

Luckier than other layer 1 brethren, $SOL's onchain data shows that the coin's trading volume remains relatively stable at $1 billion. Low-fee blockchains like Solana become the top alternative for users when it comes to NFT minting. Therefore, Solana still receives great attention from users.

However, the problem of Solana's security and decentralization is in question when in less than 2 years Solana's network has been found to be shut down and restarted many times. In addition, there are scandals about incidents of hacker attacks. At the beginning of August, the Nomad bridge, used to transfer tokens from the platforms, was hacked and took away about 190 million USD. As a result, more than 8000 Solana users lost their funds. Take a closer look at an example of Solana's weakness here.

Solana has lost the trust of users lately, but good news is still coming to Solana's ecosystem as the decentralized network Helium will plan to migrate to Solana's blockchain in Q4, 2022. Nitro Labs has also announced that it will build a layer 2 for Solana. This will be the first extension of this ecosystem. Solana's price is currently trading around the $32 mark, 8 times from the $258 peak around mid-2021.

In the personal opinion of the writer, although the question of security and decentralization of Solana is indeed a concern for investors in $SOL. However, if Solana's team works hard and focuses on developing new things, overcoming the previous consequences, Solana still has the potential to bounce back. The price of BTC returning to the 19K area has also brought $SOL back to a pretty good valuation area. Investors holding $SOL can, depending on their position, decide to continue holding $SOL or look for new opportunities.

Conclusion

In general, when the market recovers or uptrend again, the price of $BTC grows, the individual who writes the price assessment of these layer 1 coins will still grow again. However, the cash flow of the market always gives priority to new and potential things, such as Aptos or Sui, which are promising Layer 1s. Therefore, investors should consider themselves with the types of assets they are holding in order to optimize profits and not be buried for too long.