Coin Metrics State of the Network update noted that as blockspace scales and transaction costs keep falling, differentiation between various blockchains is gradually shifting from cost to more use-case specialization. Coin Metrics also touched on Bitcoin’s 20 millionth coin being mined in the past month, while a growing ecosystem of wrapped digital tokens as well as ZK rollups are starting to unlock Bitcoin’s programmability and “productive utility.”

In its extensive update, Coin Metrics pointed out that Ethereum, the second-largest cryptocurrency and largest dApp development platform, is now reinforcing its role as the on-chain liquidity as well as settlement hub, with L1 fees at “record lows” as L2s gradually evolve from simple scaling solutions to more specialized execution environments.

Meanwhile, Coin Metrics also noted that Solana is advancing its Internet Capital Markets vision via rising payments adoption and sophisticated onchain trading infrastructure, with Alpenglow targeting “sub-second finality.”

Coin Metrics also mentioned that the cost of transacting onchain has fallen as blockspace scales across networks.

Ethereum mainnet fees have declined as well after recent upgrades,

Solana transactions remain at “fractions of a cent,” and L2s offer similarly low-cost execution environments.

As costs continue to compress, blockspace differentiation is being defined by ecosystem liquidity, throughput, and use-case specialization instead of marginal cost advantages.

As widely reported, in March of this year, the 20 millionth Bitcoin was finally mined, leaving just 1 million BTC left to be issued going ahead.

More than 95% of Bitcoin’s total supply is now in circulation, and with the block subsidy now at 3.125 BTC following the April 2024 halving, issuance continues to decline.

And as block rewards fall, transaction fees become a more vital component of miner revenue.

Outside of occasional spikes, transaction fees make up “less than 1% of total miner revenue.”

Coin Metrics also stated that since fees on Bitcoin flow entirely to miners, the long-term question for Bitcoin’s security model is “whether organic fee demand can sustainably fill the gap left by declining issuance.”

And despite Bitcoin’s ~$1.3T market cap, about 60% of BTC has not moved in more than a year, and “approximately 2.4 million BTC (around 11% of supply) sits on centralized exchanges while an additional ~243,000 BTC circulates as wrapped tokens on other chains.”

The majority of Bitcoin’s capital base remains “economically passive, and most of the activity and fee generation around it happens off the base layer.”

The report added:

“Bitcoin’s functional role is evolving along two fronts: expanding base‑layer programmability and increasing BTC’s productive utility. A growing ecosystem of sidechains, L2s like the Lightning Network, wrapped Bitcoin tokens and liquid staking protocols have enhanced Bitcoin utility, but carry varying degrees of trust assumptions, from fully custodial to smart contract-based models.”

Meanwhile, Ethereum, the world’s largest smart contract platform, continues to serve as the liquidity and settlement solution.

It holds around ~62% of total stablecoin market cap at the time of writing, hosts the deepest decentralized finance (DeFi) liquidity of any major blockchain, and is increasingly serving as the destination for tokenized real-world assets (RWAs), including innovative money market funds as well as tokenized treasuries and equities.

As transacting on L1 becomes materially cheaper, the role of Ethereum’s Layer‑2s is being re‑examined.

L2s were conceived as Ethereum’s main scaling mechanism, “offloading execution to bring costs down.”

That objective is now said to be steadily shifting.

As explained in a blog post from the Ethereum Foundation, the main purpose of L2s is now to offer more differentiated features, customizations, and specialized execution environments, with “additional scale as a secondary benefit.”

The Ethereum roadmap now further encourages deeper L1/L2 integration via interoperability and trust-minimized architectures like native rollups, which could “reinforce ETH’s role as the ecosystem’s liquidity and settlement core.”

Solana is now said to be moving beyond its early reputation as the “retail and memecoin chain” towards its so-called Internet Capital Markets vision.

Despite this growth, Solana still does not benefit nearly as much from network effects and sufficient levels of decentralization like Bitcoin or even Ethereum. And while its current growth metrics are commendable, there’s a lot of room for improvement so that it can become more secure and resilient.

The report also mentioned that sub-cent transaction fees and block times under 400 milliseconds make Solana the “natural environment” for apps that require greater velocity like payments, micropayments, high-frequency trading. The Coin Metrics update concluded that this particular profile is attracting a “distinct class of applications that require low-latency execution at scale.”