2026 Layer 1 Landscape Redefined: How Application Ecosystems, User Scale, and Asset Liquidity Will Determine the Success of Public Blockchains

In July 2026, the crypto market remains in a state of volatility under macroeconomic pressure. However, these swings in market sentiment haven’t cooled the competitive intensity at the infrastructure layer. Over the past few years, the blockchain industry’s narrative has shifted significantly—from a "performance race" to an "ecosystem competition." TPS (transactions per second) and gas fees were once the core benchmarks for evaluating public blockchains, but these metrics are now being replaced by more complex, multidimensional frameworks.

By 2026, Layer 1 competition has moved on to debates around "modular versus monolithic architectures." Institutional capital is no longer simply searching for the next "Ethereum killer," but rather for the most robust cross-chain liquidity infrastructure. The focus of public blockchain competition is shifting toward the top of the "application stack"—with applications and users now at the center, rather than underlying infrastructure or whitepapers. At the same time, crypto investment and financing remain highly concentrated in the infrastructure sector—last week, there were 16 funding events in the crypto industry. Alpaca raised $135 million, and Flex secured $70 million, continuing to reinforce the capital market’s long-term optimism for digital financial infrastructure.

Against this backdrop, understanding the new dimensions of blockchain competition—application ecosystems, user base, and asset liquidity—has become essential. This article will break down the competitive logic of next-generation digital asset infrastructure across these three dimensions, using KONET (KONET) as a case study to analyze how payment-focused blockchain networks build their ecosystem moats.

Evolving Dimensions of Competition: From Technical Metrics to Ecosystem Strength

Performance: From "Moat" to "Entry Ticket"

In the early stages of blockchain development, TPS and gas fees were indeed the core variables distinguishing different public chains. Solana built a technological moat with high throughput, while Ethereum relied on its vast validator network. But by 2026, this logic is being upended.

The Ethereum Foundation, in 2026, restructured its protocol development, merging the previously separate "scaling L1" and "scaling Blob" efforts into a unified Scale roadmap. This includes raising the gas limit, expanding data availability, optimizing execution clients, advancing statelessness, and rolling out the zkEVM attester client—all within a single scaling framework. This means that even Ethereum, once known for being "slow and expensive," is systematically boosting its execution capabilities.

As nearly every major Layer 1 continues to optimize performance parameters, technical differences are being flattened out. The marginal value of increasing TPS from 10,000 to 100,000 is far less than adding a single application with real user adoption. Performance has shifted from being a "competitive moat" to an "entry ticket"—it determines whether a blockchain is in the running, but no longer decides the ultimate winner.

Application Ecosystem: From "How Many Projects" to "How Many Users"

The strength of an ecosystem isn’t measured by the number of smart contracts, but by how long users stay and how frequently they interact. Assessing the health of an application ecosystem requires examining three layers:

First is application density: the number and diversity of DApps running on the mainnet. A diversified range of applications—DeFi, gaming, NFTs, real-world assets (RWA)—can attract users with different interests and investment profiles, providing multiple entry points to the ecosystem.

Second is user stickiness: daily active users, monthly active users, and retention rates. Low transaction fees are a core advantage, lowering the barrier for users to experiment with various DApps. However, lower fees are just a prerequisite; true stickiness depends on whether applications solve real user needs.

Third is developer activity: the number of full-time developers, code commit frequency, and speed at which new projects go live. Developer choices often have a "network effect"—the more developers join, the more robust the ecosystem’s tools and infrastructure become, which in turn attracts even more developers.

User Base: From "Address Count" to "Real Economic Activity"

User base is another key measure of ecosystem value, but "address count" is an easily manipulated metric. More meaningful is the scale of "real economic activity"—including total on-chain transaction volume, DEX trading volume, stablecoin circulation, and cross-chain asset flows.

As of July 2026, Ethereum mainnet (L1) holds about $2.5 billion in tokenized assets (including bonds, funds, stablecoins, and deposits), the highest among all public chains. These figures reflect not just the number of users, but the depth and breadth of economic activity within the ecosystem.

The core value of a large user base lies in its "self-reinforcing" nature—more users generate more transaction volume and fee revenue, which attracts more validators and developers, further enhancing network security and functionality, and ultimately drawing in even more users. This positive feedback loop is the hardest part of the ecosystem moat to replicate.

Asset Liquidity: The Core Competitive Edge in the Cross-Chain Era

As blockchain ecosystems become increasingly fragmented, asset liquidity is emerging as a key variable for long-term infrastructure value. The cross-chain bridge market is expected to surpass $3.5 billion in 2026, with cross-chain interoperability infrastructure facilitating over $1.3 trillion in annual asset transfers. The blockchain interoperability market is projected to grow from $900 million in 2025 to $1.17 billion in 2026, at a compound annual growth rate of 29.2%.

Asset liquidity has two dimensions: breadth of cross-chain connectivity—how many heterogeneous blockchains can be linked; and depth of cross-chain integration—the efficiency, cost, and security of asset movement across chains.

For any digital asset infrastructure, the inability to connect with other ecosystems confines its value to a closed system. Cross-chain infrastructure enhances ecosystem openness and reduces isolation between networks. For payment scenarios, cross-chain capability means users and businesses can move assets flexibly across different blockchain environments.

KONET’s Market Position: Infrastructure for Payment Scenarios

With this competitive framework in mind, let’s examine where KONET (KONET) fits within the next generation of digital asset infrastructure.

KONET Network is a blockchain network purpose-built for payment scenarios, aiming to provide transparent, verifiable, and low-cost digital payment infrastructure for enterprises and individuals through stablecoin settlement, on-chain receipt systems, and high-performance transaction processing. KONET uses an EVM-compatible architecture with validator governance and incorporates the EIP-1559 fee model.

As of July 23, 2026, according to Gate market data, KONET (KONET) is priced at $0.023920, down 0.22% over 24 hours, up 41.60% over 7 days, down 28.81% over 30 days, and up 4.21% over the past year. Its market cap is approximately $11.01 million, ranking 1,021st. The total supply is 1 billion tokens, and its market sentiment rating is neutral.

From an ecosystem perspective, KONET’s differentiated approach is evident in several areas:

Specialization in payment scenarios. Unlike public chains aiming to be "general-purpose computing platforms," KONET targets the specific domain of payments and settlements. Its design goal is to build a dedicated infrastructure layer for payments and settlements, recording payment data, transaction verification, and receipt management on-chain. This addresses issues in traditional payment systems such as data silos, high verification costs, and inefficient cross-institution collaboration. By focusing on this vertical, KONET aims to build deep expertise in payments rather than getting lost in generalized competition.

Differentiated on-chain receipt system. KONET records payment receipts directly on the blockchain ledger, creating immutable on-chain receipts. Enterprises can use this data for payment confirmation, reconciliation, and audit verification. This transforms the blockchain from a simple payment network into a trusted data infrastructure. For enterprise clients, this feature directly addresses the high reconciliation costs and cumbersome audit processes of traditional payment systems.

EVM compatibility and developer ecosystem. KONET supports an EVM (Ethereum Virtual Machine) compatible environment, allowing developers to use existing Ethereum tools and smart contract frameworks. This compatibility lowers the entry barrier for developers and encourages migration of existing Web3 applications to the KONET ecosystem. Reducing the cost for developers to join is the first step in kickstarting a positive feedback loop for ecosystem growth.

Cross-chain infrastructure deployment. KONET Bridge aims to connect KONET with other blockchain networks, enabling asset and data transfers across chains. As asset liquidity becomes increasingly crucial, building cross-chain capabilities is directly tied to KONET’s openness and scalability.

Comprehensive ecosystem components. The KONET ecosystem includes the KONET mainnet, native token KONET, on-chain receipt system, wallet service (KONWallet), cross-chain infrastructure, and the KONET LAB development platform. Together, these components form a complete system for payments, verification, development, and ecosystem expansion.

It’s important to note that KONET is still in the early stages of ecosystem development. Its market cap (around $11 million) is orders of magnitude below leading Layer 1 projects, and its application ecosystem and user base still require ongoing validation. However, from a strategic perspective, focusing on payment scenarios represents a different competitive approach from "general-purpose blockchains"—building deep advantages in a vertical, rather than spreading thin across all fronts.

Building Ecosystem Moats: A Systemic Approach from Technology to Governance

In summary, the ecosystem moat of digital asset infrastructure is not built on a single factor, but through the synergy of multiple dimensions.

On the technical side, EVM compatibility, transaction processing capabilities, and fee models form the foundation of competitiveness. However, the true value of these technical metrics lies in their ability to support applications, not in the technical specs themselves.

On the ecosystem side, the number of applications, user base, and developer activity create the core of the positive feedback loop. When an ecosystem surpasses 5,000 DApps and reaches 3.7 million daily active users, network effects become an insurmountable moat.

On the asset side, cross-chain interoperability and asset liquidity determine the openness of the ecosystem. In a multi-chain landscape, any closed ecosystem risks value leakage.

On the governance side, as institutional capital enters and regulatory frameworks become clearer, compliance is emerging as a new dimension of infrastructure competition. Augustus’s conditional approval by the US Office of the Comptroller of the Currency to become a federally chartered national clearing bank, and the increase in licensed institutions to 294 after the MiCA transition period, both highlight that governance is becoming an indispensable competitive factor for digital asset infrastructure.

As Injective CEO Eric Chen noted, the next phase of Layer 1 competition may no longer be determined by raw throughput metrics, but by the ability of teams to scale while maintaining distributed validation and minimizing systemic dependencies.

Conclusion

In 2026, the blockchain industry stands at a clear inflection point. After years proving blockchain’s viability, the challenge now is not to create new blockchains, but to build financial infrastructure that banks, payment companies, enterprises, and institutions can use in everyday operations.

Against this backdrop, the competitive logic for digital asset infrastructure is undergoing a fundamental shift. TPS and gas fees are no longer the deciding factors. The richness of the application ecosystem, authenticity of the user base, efficiency of asset liquidity, and completeness of governance now define the new competitive dimensions. As a payment-focused infrastructure project, KONET’s strategic choice represents a differentiated path for the next generation of digital asset infrastructure—building deep advantages in verticals, and connecting digital assets to real-world economic activity through on-chain receipts, cross-chain capabilities, and developer platforms.

Of course, building ecosystem moats is a long-term process. Whether it’s KONET or other emerging infrastructure projects, sustained investment is needed across technology, ecosystem growth, and governance. But the direction is clear: in the next phase of blockchain competition, the winners will be those who can build truly sustainable digital asset ecosystems.

FAQ

Q: What is KONET’s position in the digital asset infrastructure landscape?

KONET is a blockchain network focused on payment scenarios, specializing in providing digital payment infrastructure through stablecoin settlement, on-chain receipt systems, and high-performance transaction processing. Its differentiation lies in scenario focus—building deep advantages in payments rather than pursuing a general-purpose smart contract platform.

Q: Why are TPS and gas fees no longer the core metrics for public blockchain competition?

Because nearly all major Layer 1s are continuously optimizing performance, technical differences are being leveled out. Once performance shifts from a "moat" to an "entry ticket," the long-term value of a public chain is determined by the richness of its application ecosystem, authenticity of its user base, and the efficiency of asset liquidity.

Q: What is an "ecosystem moat" and how is it built?

An ecosystem moat is the positive feedback loop formed by the number of applications, user base, developer activity, and asset liquidity. More users drive more transactions and revenue, attracting more validators and developers, which further enhances network security and functionality, ultimately drawing in even more users—this self-reinforcing mechanism is the hardest competitive moat to replicate.

Q: How important is cross-chain capability for digital asset infrastructure?

The cross-chain bridge market is projected to surpass $3.5 billion in 2026, with cross-chain interoperability infrastructure facilitating over $1.3 trillion in annual asset transfers. As asset liquidity becomes increasingly vital, cross-chain capability directly determines the openness and scalability of an ecosystem.

Q: What are the main trends in digital asset infrastructure in 2026?

Accelerated entry of institutional capital, gradual improvement of regulatory frameworks, and ongoing optimization of payment and settlement infrastructure are the three core trends. Last week’s 16 crypto funding events, heavily concentrated in infrastructure, confirm the capital market’s long-term confidence in this sector.