and the distribution of digital products.
State of Fuel Q4 2024
- FUEL’s TGE occurred on Dec. 19, 2024. Its ecosystem has expanded to ~70 live decentralized applications with ~20 more in development.
- Fuel Ignition experienced steady growth in network activity, with daily transactions increasing ~15.93% since launch, peaking at ~356,366 transactions in a single day.
- Fuel’s DeFi ecosystem saw rapid growth, with TVL reaching a peak of ~$416.38 million. Leading DeFi applications (e.g., Swaylend, Mira Protocol, and Fluid Protocol) drove adoption, with Swaylend emerging as the top lending platform and Mira Protocol capturing over 99% of Fuel’s DEX volume.
- FUEL’s market cap reached ~$247.25 million, reflecting a ~38.54% increase post-TGE. The token price rose ~38.11% following its TGE, signaling strong early interest despite broader market conditions.
- Fuel’s tokenomics are designed for long-term sustainability, with ~51% of the total supply allocated to community incentives and ecosystem development.
Fuel is a high-performance Ethereum Layer-2 powered by the FuelVM, built to enhance PSI (parallelization, state-minimized execution, interoperability). Fuel’s technology stack also includes the Sway programming language optimized for blockchain development. The network provides a suite of developer tools, such as Forc (Fuel Orchestrator) and Fuelup (toolchain manager), along with SDKs and APIs to facilitate development.
FuelVM utilizes a UTXO model with strict state access lists, which allows transactions to be executed in parallel. This capability enables the network to leverage multiple CPU threads and cores, increasing compute power, state access, and transaction throughput compared to traditional single-threaded blockchains.
Sway is a custom-built, domain-specific programming language optimized for blockchain development. It combines Rust’s safety mechanisms with Solidity’s smart contracts, including built-in contract storage and blockchain functionalities, which makes integrating blockchain-specific syntax easier. Sway prioritizes compile-time analysis and safety by offering static auditing for smart contracts. It also features a modular backend that can be adapted to different blockchain architectures.
The Fuel Network refers to the broader Fuel ecosystem, encompassing its technology, community, and infrastructure. The network leverages Ethereum for data availability and features a one-second block time, with a focus on mitigating state growth and state bloat issues. Fuel v1 was the first to reach the status of being a Stage 2 Appchain Optimistic Rollup.
Fuel Ignition, an Optimistic rollup on the Fuel Network, marks the transition from development to a fully operational network. Fuel Ignition was built with state-growth and state-bloat mitigation in mind, addressing what many consider blockchain’s fundamental bottleneck and benefits from a hybrid proving system utilizing zero-knowledge proofs (zkps). Fuel Ignition has low fees and high throughput, achieving over 600 transactions per second (TPS) when using Ethereum data availability and up to 21,000 TPS per CPU core, making it one of the most scalable Ethereum Layer-2 solutions. Fuel Ignition launched on Oct. 15, 2024, and the Token Generation Event (TGE) for FUEL occurred on Dec. 19, 2024.
Website / X (Twitter) / Forum / FuelVM
Key Metrics
Financial AnalysisMarket Cap
Since its TGE on Dec. 19, 2024, FUEL’s market capitalization has increased ~38.54% to ~$247.25 million, and the token price has increased ~38.11% over the same period.
Onchain Costs
Onchain costs on Fuel Ignition can be an indicator of network activity, rising in response to increased usage and declining when activity slows. Blobs and calldata relate to data storage and availability, while compute covers transaction execution and overhead accounts for fixed operational expenses. Rollup operators optimize costs by minimizing calldata usage (favoring blobs) and reducing compute intensity through efficient execution models like parallel processing.
Copilot Insights: What are blobs, and how do they contribute to onchain costs?- Blobs (Data Availability Costs): These costs arise from storing large amounts of batched transaction data offchain while ensuring it remains accessible. Rollups post blob data to Ethereum using Proto-Danksharding with EIP-4844 which significantly reduces calldata costs. This cost scales with the volume of transactions that require data availability.
- Compute (Execution Costs): This represents the cost of executing smart contracts and processing transactions on the rollup. It is influenced by factors such as the complexity of smart contract operations, the number of transactions, and gas fees per computational step.
- Overhead (Fixed Protocol Costs): These are base fees associated with operating the rollup, including sequencer fees, proof generation costs (for ZK-rollups), and any additional consensus mechanisms required to validate state transitions. Overhead costs do not fluctuate significantly based on transaction volume but are necessary for maintaining the network.
- Calldata (L1 Posting Costs): This cost is associated with submitting transaction data to Ethereum mainnet for verification and security purposes. Calldata is stored permanently on Ethereum and directly impacts rollup costs. It is one of the most expensive components of running a rollup without EIP-4844 optimizations, as Ethereum gas fees apply to all posted calldata.
Fuel Ignition saw steady growth in daily transactions, peaking in December at ~356,366 transactions in a single day. Overall, daily transactions increased by ~15.93%, showing increased demand for network usage.
There are currently ~70 live decentralized applications on FUEL, with another ~20 in development.
Fuel Ignition saw a significant increase in TVL since its launch on Oct. 15, 2024, reaching a maximum of ~$416.38 million.
DeFi
Fuel Ignition’s main DeFi applications are Swaylend, Mira Protocol, and Fluid Protocol, which account for most DeFi TVL.
Swaylend is the leading lending protocol on Fuel Ignition, offering yield and SwayPoints on FUEL, USDC, wETH, and other ETH derivatives. Mira Protocol is the leading DEX on Fuel Ignition, allowing users to swap between tokens while also earning FUEL. Fluid Protocol offers native decentralized stablecoin on Fuel Ignition, USDF, which, on Dec. 31, 2024, had ~1.38 million tokens in circulation.
DEX
Mira Protocol is the top DEX on Fuel, with over 99% of the market share. Since the launch of Fuel Ignition, Mira has facilitated over $98 million in volume. The significant spike in DEX volume can be attributed to the launch of FUEL on Dec. 19, 2024. V12, formally known as Spark, which only had ~0.13% of the total volume on Fuel Ignition, is looking to gain more of a share in volume as its product offering expands.
FUEL TokenomicsFUEL has a total token supply of 10 billion, with an annual inflation rate of 3%. Users that claimed Phase 1 of the FUEL airdrop and/or bought on the open market post-TGE can stake their tokens on Fuel. The FUEL token has three primary use cases: (i) securing the network, (ii) paying for onchain resources, and (iii) application-specific sequencing.
Of the 10 billion tokens, 20% of the initial supply was allocated to the community. In total, ~51% of FUEL will be allocated to the community through airdrops, ecosystem support, and R&D efforts.
Token supply curves help determine when an increase in sell pressure may occur. More specifically, they show when tokens unlock and to whom.
Token unlocks for the “Community” and “Ecosystem and R&D” allocations vested immediately, while unlocks for “Ecosystem and R&D 24,” “Contributors 24,” and “Purchasers” follow a 24-month linear release, and “Contributors 48” follows a 48-month linear release. The project team and purchasers, who fall into the 24-month linear vesting schedule, cannot stake locked tokens.
RoadmapFuel plans to continue improving Fuel Ignition while also building out two additional products: Fuel [REDACTED] and Fuel Sequencer.
Fuel Ignition’s roadmap aims to land the rollup in Stage 2.
Fuel Sequencer will progress through three phases of development.
Closing SummaryIn Q4 2024, Fuel demonstrated significant progress in ecosystem expansion and network adoption following the launch of Fuel Ignition and the TGE of FUEL. Despite broader market fluctuations, Fuel’s fundamentals remained strong, with rising transaction volumes, DEX volumes, and TVL. The growth of DeFi protocols like Swaylend, Mira Protocol, and Fluid Protocol highlights the network’s growing adoption and diversity of product offerings.
As Fuel moves into 2025, its priorities include the continued development of Fuel Ignition, Fuel [REDACTED], and Fuel Sequencer. Fuel is building a solid foundation for long-term growth and adoption in the Ethereum ecosystem with a focus on scalability, low fees, and innovative blockchain infrastructure.