By Joyce, BlockBeats
On June 3, Bankless released a video titled "ETHEREUM VS. SOLANA: Which Blockchain Wins 2024 & Beyond?", inviting Solana founder Anatoly Yakovenko and Ethereum Foundation researcher Justin Drake to talk about their respective views on the Ethereum and Solana ecosystems. This nearly two-hour debate from the crypto community's super ecosystem has received a lot of attention in the overseas community.
The two most watched ecosystems in the crypto industry present their respective controversies in this video in the form of direct dialogue between "representatives". Even ordinary community users who are not familiar with the specific technical details can feel the "temperament difference" between Ethereum and Solana.
As summarized by community user Phoenixzen83, SOL stands for "Practical, Execution, Action Bias, User Obsessed, Realist, Fail Early/Fast/Iterate/Improve/Push Boundaries/Find PMF, Application/Product Centric", and ETH stands for "Academic, Idealistic, Rustic, Rigorous on all edge cases, Focused on infrastructure, Move slow and steady/Battle-tested security".
Dragonfly founder Haseeb, Messari product vice president Jimmy Skuros and others forwarded and recommended this video. Delphi Digital founder Tommy also made an AI summary for this video. The community also held many derivative discussions around this debate.
This article organizes the video content and sorts out the relevant discussions in the community that are worth paying attention to.
What topics were debated?
For the crypto community, the technical and ecological disputes between Ethereum and Solana are already a commonplace topic. But in this video, Bankless set the discussion agenda into four parts: "good, bad, ugly, and final." The two representatives successively elaborated on their optimistic views on the Ethereum and Solana ecosystems, pointed out the temporary and solvable deficiencies in the ecosystems, expressed their views on the defects of the other ecosystem that are difficult to fix in the "ugly" part, and made a "concluding statement" at the end to express the ultimate vision of the ecosystem.
「Good」：
1. Justin praised Solana’s high throughput, low fees, good user experience, wide adoption, and good financial performance, and believed that it was part of healthy competition that could accelerate the development of Ethereum.
2. Anatoly praised Ethereum’s large-scale distributed node network and strong security guarantees, believing that it is superior to the simple majority honesty assumption.
「Bad」：
1. Anatoly criticized Ethereum’s EVM design and the split between L1 and L2, believing that this led to friction among developers and fragmentation of liquidity.
2. Justin believes that Solana’s design of short block time and low slot-to-ping ratio may lead to centralized timing attacks by validators.
「Ugly」：
1. Justin believes that Solana’s isolation from Ethereum’s network effects as L1 limits its potential.
2. Anatoly believes that Ethereum's focus on "ultrasound money" makes it difficult to extract value from execution/transaction fees.
「Final」：
1. Anatoly believes Solana will optimize hardware/bandwidth improvements to provide the fastest and cheapest global state applications.
2. Justin believes that Ethereum’s network effects and composability make it the dominant “Internet of Value”, while Solana has a small chance of surpassing its position.
Key points of debate:
1. Whether high token issuance or inflation will result in additional costs to the network or users, especially given that staking rewards may be subject to taxation. (Justin thinks so, Anatoly disagrees).
2. The importance of economic security in blockchain networks and the cost of a 51% attack (Justin thinks this question is critical, while Anatoly thinks it’s just a joke and calls it a “meme”).
3. Solana’s low slot-to-ping ratio may lead to centralization risk of timing attacks (Justin believes it will lead to centralization, Anatoly disagrees).
How does the community take sides?
Matthew Sigel, Head of Research at Van Eck (supporting Justin):
The winner was Justin, and it was a hard-fought win, but it was still a tough one.
1. The economic security issue is not a joke. Drake is right, economic security is very important, and Toly is foolish to try to deny it. If 51% (or 66%) of the stake is controlled, a large amount of locked value could be seized in an attack. Economic security is critical.
2. Tax issues do bring some selling pressure, because the tax obligations generated by staking rewards will cause holders to have to sell tokens to pay taxes. This is seen as a cost of the network, just like miners use Bitcoin to pay mining expenses (such as electricity costs), which is also a cost.
3. The discussion about MEV's short block time on Solana leading to more centralization is very interesting, but needs to be empirically discussed to get data. As far as we know, Ethereum has 7,200 blocks per day, while Solana has 216,000 blocks. Each block confers sorting rights. It is easier to win these blocks if you are very close because you have an information advantage and are able to get the "last say" in the block auction. In theory, this advantage only applies to the last part of the block, such as 100 milliseconds.
For Solana, 1/4 of the blocks provide a latency advantage, while for Ethereum it is 1/120. Presumably, you have more chances to earn latency-sensitive MEV because you have more blocks. This means that short block times give those with extremely low latency a lot of opportunities to get better at rescheduling blocks. This should be centralizing because the best builders win. This explains why in our model, MEV is a larger percentage of SOL revenue than ETH (68% vs. 38%). This is by design.
4. Justin mentioned that cryptocurrency is interdisciplinary, not just technology-oriented, which is important. Toly’s approach is to simply build the fastest and best, perhaps Solana’s virtual machine can be deployed as an L2.
5. Justin mentioned validators as decentralized sorters to enable MEV capture and fee capture on Ethereum. We are not sure how L2 (and token holders) will agree on this. Also, cross-L2 compatibility will require all L2s to migrate to ZK technology, which may take some time.
Sreeram Kannan, Founder of Eigenlayer (Neutral):
Justin and Toly are both right, we still don’t have good metrics.
1. Solana’s shorter slot time does lead to less MEV (as Toly said); but it also leads to more timing games (as Justin said).
2. Ethereum’s L2 roadmap bets on ETH as a “programmable decentralized currency” with a secure and available area covering all L2. Toly is right on this point. But as Justin points out, sequence-based and real-time proofs can bring all value accumulation back to L1, based on the utility of synchronous combinations. Toly does not respond to this value proposition.
3. On EVM and other virtual machines, the L2 roadmap is designed to remain neutral to virtual machines, as long as zk proofs can be written in EVM.
4. In terms of economic security, both immediate security and activity are necessary.
5. Toly seems to think that liveness attacks are limited to MEV extraction. The total value of all lending markets, decentralized stablecoins, DEXs, fast options protocols, etc. is at risk due to validator censorship. This is because the security of a DeFi protocol relies on the liveness of L1. Similarly, this is also true for optimistic Rollups. So for the economic security of these DeFi protocols, the total stake should exceed the total amount on these protocols.
6. Regarding the TVL vs. transaction volume question, both metrics are corrupted by reward chasing (the latter is easier).
Uniswap founder Hayden (neutral):
Support Justin on the long-term thinking and Toly on the short-term application.
1. Agree with Justin that "transaction demand will far exceed the levels we see today." Agree with Toly that "Ethereum's biggest obstacle is the uncertainty of the long-term value of DA and the uncertainty of the vision of 'Ultrasound Money'."
2. Support Justin on network effects, research, and long-term thinking; support Toly on applications, engineering, and near-term thinking.
3. I have no opinion on the discussion of token issuance and costs. I feel that the debate there is more like a discussion about terminology and definitions, and does not involve substantive issues.
4. Of course, we need to expand the discussion on these two aspects. Both Ethereum’s seamless state machine and Solana’s single state machine are worthy of attention.
Richard, founder of Tesnor (supporting Anatoly):
To some extent, economic security is indeed a mystery.
1. Anatoly (Solana) believes that the execution phase is the key to value accumulation. Good engineering design is more important than economic security, because economic security may cover up design problems.
2. Justin (Ethereum) believes that lightweight clients should be possible. In the final state, economic security is indeed important.
3. Agree with the view that "economic security is a joke" because in some cases, measuring the security of the network by marking the total locked value (TVL) of inflation as market value is not enough to make up for the poor token design or poor engineering design of some projects. You can refer to the Terra project as an example, the inflationary TVL does not fully reflect the true value of the network.
4. But at the same time, if the external value on the PoS (Proof of Stake) chain far exceeds the holdings of the honest majority, then a "liveliness attack" may occur, that is, an attack that exploits the vulnerability of network activity. Although the external value on most PoS chains has not yet exceeded the internal value, this situation may change in some cases.
Galaxy Researcher Christine Kim (supporting Justin):
Lack of long-term thinking is why SOL cannot catch up with ETH’s valuation.
1. The MEV part is the most interesting to me, and the question of whether edge validators can benefit from co-location is actually a centralized force or a negligible force is something that even ETH stakeholders are struggling with.
2. I agree with Anatoly that economic security is the "meme" of POS blockchain networks, and that a rollup-centric roadmap leads to fragmentation and low l1 revenue. But in my opinion, Justin Drake's final idea allows ETH to have the most compelling network effect, which is why Solana may never catch up with ETH's valuation.
3. After all, cryptocurrency valuations are rarely based on fundamentals.
Trader Vapor (support Toly)
Comparing Ethereum 20 years in the future to Solana today is nothing more than wishful thinking.
1. Justin's main arguments in favor of Ethereum are still TVL, brand, reputation, and network effects. He advocates that "Ethereum's ecosystem is strong in quality, while Solana's ecosystem is strong in quantity", and believes that the market value of a single meme coin ($SHIB) on Ethereum is equivalent to the sum of the market values of all meme coins on Solana. Ethereum is a thriving and interconnected ecosystem, while Solana is a remote Pacific island that is closed to itself.
2. Justin talks about Ethereum's millions of tps and "synchronous composability" between L2 as if it's already been done. Surprised at how weak the argument is from one of Ethereum's main developers. All of these (reputation, brand, TVL) are not moats, and comparing Ethereum in 20 years to Solana today is nothing more than wishful thinking.
3. In fact, the value of Ethereum is being actively mined by the L2 sorter on the execution side and the DA protocol on the DA side. L2 is an isolated ecosystem that destroys the killer application of smart contract platforms, which is composability.
4. The only things left are memes like Ultrasound Money, ETFs, and the "legitimacy" of $ETH assets vs. $BTC. That's still a lot, but none of it relies on the technology itself, but partly involves faith.