Layer 1

Definition

Layer 1 chains (Bitcoin, Ethereum, Solana, etc.) provide consensus and settlement. Researchers compare security, throughput, fees, developer activity, and how the token captures demand — because chain usage does not automatically mean token capture.

L1 research mixes infrastructure and monetary narratives. Security budget, client diversity, fee markets, and developer traction move slower than Twitter rotations, which is why fundamentals and narratives often diverge for quarters.

Ask how the L1 token captures demand: gas, staking, MEV share, or mostly meme premium. Usage without capture is a common bull trap dressed as “ecosystem growth.” Durable demand should still make sense after the buzzword cools.

Peer comps should match architecture and stage. A young high-throughput chain and a mature settlement layer are not the same research object even if both sit in an “L1” bucket.

Why researchers care

• L1 narratives rotate — fundamentals move slower.
• Token capture ≠ chain usage automatically.
• See Alphora’s Layer 1 sector page for peer research.
• Fee quality and real settlement demand beat vanity TPS claims.

How to use it in research

• Rising active addresses with falling fee revenue — question quality of usage.
• Compare staking inflation versus fee burn when modeling net issuance.
• Track developer or integrator momentum alongside price when narratives cool.

Common mistakes

• Equating TPS marketing with sustainable demand.
• Ignoring inflation while celebrating “usage.”
• Valuing every L1 as if it had Ethereum’s settlement share.