The cryptocurrency market shrank broadly across on-chain activity in the first half, rather than seeing funds shift into specific areas, Binance Research said in its first-half on-chain market report.

Global DeFi total value locked (TVL) fell 38% to $43.4 billion, the report said. The combined market capitalisation of six major Layer 1 (L1) networks dropped 42% to $246.5 billion.

BNB Chain emerged as a hub for tokenised stock trading. It recorded an annualised burn rate of 5.05% and was the only major Layer 1 to remain deflationary.

Buying of ethereum has recently been led by companies rather than ETFs. Spot ETFs' ETH holdings fell to 5.2 million tokens, while holdings by digital asset treasury holding companies (DAT) rose to 7.7 million.

General-purpose Layer 2 activity also fell sharply. From January to June, the number of user transactions dropped by about 77%. Solana network revenue declined 64.5%.

The crypto sector saw 207 security incidents in the first half alone, with losses reaching $972 million. Monthly notional trading volume in prediction markets surged 86% to $51.6 billion, driven by the World Cup and non-sports events. Kalshi and Polymarket accounted for 92% of total trading volume in June.