As a researcher with a background in blockchain technology and experience in analyzing the cryptocurrency market, I find Solana’s potential to overtake Ethereum in transaction fees an intriguing development. Dan Smith’s assertion that this could happen as soon as this week is noteworthy, especially considering the significance of captured MEV in the competition between these two networks.
The transaction fees on the Solana network might surpass those of Ethereum, which could be a noteworthy milestone for Solana’s reputation as a potential “Ethereum alternative.”
According to Dan Smith, a senior research analyst at Blockworks, Solana may overtake Ethereum’s transaction fees as early as this week. He made this statement in a recent blog post on May 7th.
“Solana will flip Ethereum in transaction fees + captured MEV this month, maybe even this week.”
MEV, or Maximal Extractable Value, signifies the substantial profits gained predominantly via arbitrage deals in the protocols. In simpler terms, MEV represents the greatest value that can be taken out of a blockchain system by an individual or a team.
On May 7, Solana’s economic value of approximately $2.8 million was nearly equal to Ethereum’s economic value of around $3.1 million, as reported in Smith’s X post.
“Defining “total economic value” (shill me better names) as total transaction fees + captured MEV returned to validators. Yesterday, Ethereum: $3,165,772, Solana: $2,803,313.”
Despite the fact that Solana processes fewer daily transaction fees than Ethereum, the gap is significant. According to DefiLlama data, Ethereum recorded transactions worth approximately $2.75 million in the last 24 hours, whereas Solana handled around $1.49 million in fees during the same period.
In terms of the total value secured, Solana’s $3.94 billion ranks as only approximately 7.4% of Ethereum‘s substantial $53 billion.
Is Solana really an “Ethereum killer”?
In March 2020, Solana was launched as a mainnet with an announced capability of handling up to 50,000 transactions per second (TPS). Positioning itself as a potential successor to Ethereum, Solana aims to address the scalability issues and inefficiencies that have been long-standing concerns.
As a researcher studying the differences between blockchain networks, I’ve come across an intriguing contrast between Ethereum and Solana’s approaches to scalability and transaction fees. While Ethereum relies on layer-2 (L2) scaling solutions to enhance its modular structure, Solana takes a monolithic approach to achieving scalability and maintaining low fees within its own network.
As a network analysis expert, I’ve observed that Solana’s approach has faced significant criticism due to past outages. In early April, the surge in memecoin demand led to approximately 75% of Solana transactions failing. The network struggled to cope with the massive influx of requests, resulting in this unfortunate incident.
Five hours of block production on Solana came to a halt on February 6th, as reported by Solana’s status page. Engineers and validators worked together to resolve the issue and successfully restarted the network afterwards.
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2024-05-08 15:03