In 2025, a lot of Layer 1 and Layer 2 crypto tokens had a rough year. Even though developers kept building, prices dropped hard as money and users moved elsewhere — mainly into Bitcoin, Ethereum, BNB Chain, and platforms that actually make money.
A new year-end report from OAK Research shows just how big the shift was. Bitcoin stayed strong, while many alternative blockchains lost both value and users. The message from the market was clear: hype is no longer enough. Projects now need real economic value.
Across major blockchains, monthly active users fell by more than 25%. Solana was hit the hardest, losing nearly 94 million users — over 60% of its activity. At the same time, BNB Chain went the opposite direction and nearly tripled its user base by pulling people in from other networks.
Layer 2 networks didn’t escape the pain either. Base stood out as a winner, growing its locked value thanks largely to Coinbase’s reach. Optimism, on the other hand, saw a big drop as capital moved to stronger competitors.
By the end of the year, most Layer 1 tokens were deep in the red. Many Layer 2 tokens followed the same path. Optimism and zkSync saw heavy losses. Polygon and Arbitrum also fell sharply. Mantle was one of the few that showed a small gain, but analysts say that had more to do with tight token supply than real strength.
So why did this happen?
The report points to three main reasons. First, too many tokens were released too fast, putting constant selling pressure on prices. Second, many blockchains failed to link real usage to actual demand for their tokens. And third, big investors preferred to stick with Bitcoin and Ethereum instead of betting on smaller, riskier projects.
What’s interesting is that developers didn’t quit. Data from Electric Capital shows strong building activity across several ecosystems. Ethereum still has the biggest developer base. Bitcoin saw the fastest growth in full-time developers over the past two years. Solana also continued to grow on the technical side, even while its token struggled.
This gap between building and pricing shows how the market has grown up. Developers are still working, but investors are no longer rewarding projects just for being infrastructure. They want revenue.
That’s where stablecoins and trading platforms came out on top. Tether and Circle brought in massive income. Derivatives platforms also earned steady fees. Meanwhile, many Layer 1 and Layer 2 tokens couldn’t compete because they didn’t offer anything clearly better or cheaper.
Looking ahead to 2026, the outlook is still tough for generic infrastructure tokens. Even with clearer regulations, high token inflation, weak demand for governance tokens, and poor value capture remain big problems.
Some projects that actually generate revenue may survive and stabilize. But many others will likely fade away. The future belongs to networks that make money, attract real users, and prove their value — not just those with good tech and big promises.
