The battle for layer one supremacy is on standby during a bear market.
But it’s in these times when blockchains upgrade their game and prepare for the next bull run.
The real challenge for blockchains comes with hyped times.
Two prominent contenders, Solana and Ethereum, have the potential to shape the future of decentralized applications and digital finance. Although Ethereum is the 800-pound gorilla today, things can change for the next bull run.
Ethereum has been at the forefront of the blockchain revolution. Still, Solana has emerged to address Ethereum’s scalability limitations and aims to provide a high-performance blockchain infrastructure capable of handling immense transaction volumes.
Can Solana be a real competitor to Ethereum’s supremacy?
Ecosystem
The $1 billion question is whether a blockchain system should be monolithic (a unified unit) or modular (independent components).
Ethereum is monolithic.
All functionalities, including smart contracts, transaction processing, and consensus mechanisms, are tightly integrated. All components of an application are tightly coupled and interconnected.
However, making changes to a specific component often requires modifying the entire system, which can be time-consuming and complex. Also, the scaling becomes quite challenging as everything operates as a single unit.
Solana is modular.
Its design is broken down into smaller, independent modules or components. Each module focuses on a specific function and can operate independently while communicating with other modules through well-defined interfaces. Solana separates its components (ledger, transaction processing, and smart contract execution) into individual modules.
This allows for easier scalability and flexibility and developers can modify specific modules without impacting the entire system. But Solana still has to show if it has the transaction required to grow its ecosystem to be a potential threat to Eth’s dominance.
Even if Solana’s infrastructure is solid, Ethereum still wins considering other metrics. Ethereum outranks Solana in liquidity, decentralization, ecosystem activity, and developer experience.
Monthly active users
This represents the count of individual users or entities actively using and interacting with a blockchain during that specific period.
By tracking the number of monthly active addresses, we can gauge the level of user engagement and activity within the blockchain network.
So how did Ethereum and Solana perform?
According to Nancen, during May Solana had 9.5 million active addresses, an 86% increase from last month, while Ethereum had 4.7 million active addresses, with a monthly decrease of 4%.
Binance leads with 12.4 million active addresses, a 14% increase since April, closely followed by Tron with 12.1 million active addresses.
Monitoring monthly active addresses helps in understanding the growth, adoption, and popularity of a blockchain network. It provides insights into the network’s user base, the level of community involvement, and the overall health of the ecosystem.
NFT activity
Part of that activity and network effect for a blockchain can be measured through engagement with NFTs. Remember that NFTs are unique digital assets that are recorded on a blockchain, typically representing digital art, collectibles, or virtual items.
Despite higher gas fees (as always), Ethereum leads the way. Eth captures $24.8 million in transactions and 30.5k in unique NFT buyers compared to Solana with only $3.7 million in transactions and 9.9k unique NFT buyers.
Developers
The number of developers in a blockchain ecosystem can also be an important signal of the activity and vibrancy within that ecosystem.
- A higher number of developers indicates a larger talent pool working on various projects and contributing to the ecosystem’s growth.
- As developers build applications and tools, it creates opportunities for other developers to collaborate, integrate, and extend the capabilities of the blockchain network. This positive feedback loop leads to an expanding ecosystem that further attracts users, investors, and businesses.
- Higher developer activity signifies ongoing development, code enhancements, bug fixes, and the overall maintenance of the blockchain network.
So how are Solana and Ethereum looking?
Even though overall full-time developers decreased from one quarter to the other, Ethereum only declined 0.1% and remains the top ecosystem for devs. As of March, Eth had 1,976 devs which are equal to all other layer-one blockchains combined. Solana has around 300 full-time devs and compared to last quarter, it decreased by around 10%.
Final thoughts
It’s difficult to definitively state which blockchain is better as it depends on specific metrics and factors.
Here’s a chart that summarizes some of the features of each blockchain.
Ethereum currently holds the lead in terms of liquidity, decentralization, ecosystem activity, and developer experience. Solana, on the other hand, is emerging as a potential competitor due to its scalability, monthly active users, higher transaction speed, and lower costs.
For now, Ethereum leads the way, but as we approach a new bull run, Ethereum will be put to the test. We’ll then see if it can maintain its lead over Solana and all other layers ones.
There is no Eth killer for now, but more of Eth being the Solana killer.