Author: 0x9999in1
At the beginning of this year, the approval of the Bitcoin spot ETF attracted a large amount of funds to flow into the crypto market. Bitcoin broke through its previous high and the bull market boom was in sight. However, judging from the current market conditions, the "fake bull phenomenon" has also made many people full of wavering speculation and doubts about the crypto market. With the approval and listing of the Ethereum spot ETF, ETH did not perform as well as its "big brother" Bitcoin. Not only did it not break through its previous high, it even almost halved on August 5. In addition, compared with the Solana ecosystem, which performed like a wolf in the MEME track in the first half of the year, the voices that continue to criticize Ethereum are endless. So have Ethereum and Solana begun to stage a "windfall"?
Why are people pessimistic about ETH?
ETH L2 paper score: not up to the passing line
The main technologies used by Ethereum's secondary network are Rollups and ZK-SNARKs. Looking at the Ethereum Rollups ecosystem, it has basically taken shape. After the Cancun upgrade EIP-4844, Ethereum's short-term technical benefits have been settled. In addition, the shard chain no longer has too high expectations under the impact of Rollup, and the waiting time cost is too high. The upgrades such as reducing node costs, simplifying protocols, and ZK-SNARKs at the bottom layer are only icing on the cake and cannot bring a brand new look to Ethereum. In addition, the ZKS and Blast airdrops released in the first half of this year did not meet the public's expectations. After the airdrops were released, the on-chain data performance was unsatisfactory, and even on some dates, there would be single-digit interactions on the entire chain. Such performance makes it difficult for the public to give Ethereum L2 a passing score.
Essentially, most Ethereum L2s choose to stack leverage at the commercial narrative level, with shared components pulled into the layer3 application chain. Although expectations and imagination are very high at the narrative level, such advantages only exist in the early stages. Once there is a very high market expectation leverage, the higher the praise, the worse the fall will naturally be. In terms of expanding the application ecosystem and empowering the coin price, it can be described as stretched.
DeFi Summer may be hard to replicate
The birth of DeFi can be said to have started with the DeFi Summer event in 2020. At that time, the verification model of the Ethereum network had just switched from PoW to PoS. People earned transaction GAS fees by staking their ETH on the Ethereum network, making ETH an interest-bearing asset that does not rely on any external factors and is purely on-chain. Later, as the wealth effect weakened and the bubble burst, the grand occasion of DeFi Summer no longer existed.
At present, Vitalik Buterin has also realized that Ethereum’s biggest dilemma may be its excessive financial attributes. DeFi, a perfect carrier of financial attributes, has past successful experiences and the infinite nesting doll attributes of DeFi combinations, which naturally fits people’s speculative preferences. What the Ethereum ecosystem should consider at this moment is not to reshape DeFi Summer, but to get out of the haze of pure DeFi culture.
NFT is falsified? Liquidity is a fatal flaw
In 2021-2022, NFTs that emerged from Ethereum quickly became popular in the form of "small pictures". With the promotion of stars, artists, project parties, and institutions, it quickly ushered in the so-called NFT Summer. At that time, the average weekly trading volume of the market was more than 1 billion US dollars, reaching 3.24 billion US dollars at its peak, which is comparable to the total trading volume of Uniswap.
From the current market perspective, from Ethereum to BSC, from Solana to BTC, all reflect the gradual decline of the NFT market. A very direct reason is the lack of NFT liquidity: lack of counterparties, valuation difficulties, indivisible features, and insufficient underlying technical support. To some extent, whoever solves the problem of NFT liquidity will win the entire market. But NFT fragmentation, NFTfi, Blur, Ordinals, ERC404, and SEND are essentially trying to solve this problem, although none of them have been able to provide a complete and effective solution.
Behind ETH’s upgrade innovation: Miners’ absence
After Ethereum's consensus mechanism was officially changed from PoW to PoS, miners could no longer obtain ETH through mining because PoS no longer requires high-performance mining equipment. From the perspective of the role of participating in ecological construction, miners are usually not only validators of the blockchain network, but they also often participate in other parts of the ecosystem, such as development and community building. As miners withdraw from the Ethereum ecosystem, the number of people in these fields has decreased, thus affecting the activity and innovation of the entire ecosystem.
In addition, changes in the consensus mechanism will also lead to community divisions, because although the PoS mechanism helps to improve the scalability of the chain, it may not be supported by the entire community. If a fork occurs, some miners may turn to other digital currencies, such as ETC, instead of supporting the new chain. So far, Ethereum has lost many miners driven by machine computing power. The fans accumulated over the years have been lost due to changes in the mechanism and the problem of profit distribution. While upgrading and optimizing Ethereum, it also lacks the support of this group.
Why do you think highly of Solana?
Superior technology brings super high capital efficiency
Compared to Ethereum, Solana's blockchain architecture enables faster transaction speeds and lower fees. By minimizing capital lock-up and maximizing returns, Solana empowers DeFi projects to thrive and innovate, attracting more and more users and developer communities.
In contrast, Ethereum’s network congestion and high gas fees hinder its ability to effectively compete with Solana in terms of capital efficiency. As a result, many DeFi projects are increasingly choosing Solana as their preferred platform.
According to The Block’s data dashboard, Solana’s transaction fees have reached a maximum of $5 million in the past week.
Embrace the MEME craze
Since last year's Silly, Solana has seen a constant stream of meme tokens, including the popular WIF, BOME, and SLERF. In 2024, Solana's meme tokens have captured the imagination of users and investors, sparking unprecedented hype and excitement, which is unique among all public chains.
For entrepreneurs who want to take advantage of this trend, developing a meme coin on Solana provides a unique opportunity to ride the meme coin craze and potentially reap sizable returns. With Solana's high throughput and low transaction fees, launching a meme coin project has indeed become simpler and more feasible than before. There is even a memecoinde vertical trading platform Pump.fun, which has set new revenue records. Pump.fun was originally launched for Solana. On this platform, people can deploy tokens at a cost price of less than $2. At present, Pump.fun may already be the Memecoin platform with the largest traffic on the Solana ecosystem. According to DefiLlama data, on August 13, the meme coin issuance platform Pump.fun had a revenue of $5.33 million.
Solana Blinks: This wave of big points
Not long ago, a revolutionary innovation on Solana brought a brand new user interaction experience. This revolutionary innovation includes the Solana Foundation’s announcement of two new features, Solana Actions (transactions) and Solana Blinks (blockchain links). They will allow users to connect and send transactions without leaving the current website.
Looking at Solana Actions and Solana Blinks together, the former is the underlying code logic, and ordinary users do not actually need to know too much about how it works. The latter is a front-end page, and the learning cost of user interaction is basically zero. With Blinks, many operations no longer need to be completed within the dApp, which greatly simplifies the complexity of the operation.
For example, before, when users wanted to mint an NFT, they would generally keep an eye on the project party’s Twitter messages. Before the mint time, the user would click on the mint link on Twitter to jump to the project’s official website, and then connect the wallet to the mint page/section to mint. The process seemed very cumbersome. With the emergence of Solana Blinks, users can mint NFTs with one click directly in a tweet from the project party’s Twitter.
Final Thoughts
It can be seen that Ethereum and Solana are facing completely different situations. Ethereum is facing inherent technical defects, the lost glory of Defi, and the pain brought by the NFT craze. It is experiencing a painful moment of internal and external troubles. Solana, on the other hand, has emerged from many public chains with its advantages in technology, application innovation, and MEME hotspot, and is more like a spirited dragon-slaying boy. In the next bull market, who can stride forward with their heads held high? Let's wait and see.
