I have mentioned this before, and I am happy to emphasize it once again: the supply of block space far exceeds demand. There is simply not enough activity, use cases, or applications to fill the available block space across all smart contract-capable blockchains.

This imbalance is why I firmly believe that adoption and network activity are the most critical factors for any blockchain seeking to compete with Ethereum, Solana, or the few other networks that have gained significant traction.

For blockchains that have yet to establish meaningful adoption or achieve a network effect, the challenge is particularly daunting. It reflects the classic “chicken-and-egg” dilemma: users are reluctant to join a blockchain without compelling applications, while developers and businesses are hesitant to invest in building on a network that lacks a substantial user base.

This issue is exacerbated by the distribution of liquidity—such as stablecoin issuance and other onchain assets—which tends to concentrate around the relatively few blockchains demonstrating substantial activity and engagement.

To provide clarity on this, we have created the following chart. It illustrates the top 20 smart contract-enabled blockchains by circulating market capitalization and includes our assessment of whether each has achieved a meaningful network effect.

Chart 1: Blockchain’s Network Effect

In our view, only Ethereum and Solana have truly achieved a genuine network effect. Beyond these, there are three blockchains—BNB, Tron, and Polygon—that we categorize as having a partially achieved network effect. Additionally, a handful of others show limited network effects, while the remainder lack any significant adoption or network effect altogether.

If you have any questions about this chart, such as the rationale behind our classification of specific blockchains, feel free to reach out to us in our Telegram chat.

In this note, we will examine the three key metrics that determine whether a blockchain has achieved meaningful adoption. We will also address the limitations of each metric, explaining why no single measure should be used in isolation to evaluate whether a blockchain has realized meaningful adoption or established a strong network effect.