On-chain analyst Leon Waidmann reveals that Solana has surpassed Ethereum in profitability for the first time.
Ethereum’s economic value, derived from transaction fees and miner extractable value (MEV), peaked at $40 million in late February.
Industry experts attribute Ethereum’s decline to the launch of EIP-4844 and increased activity on Layer 2 networks.
Solana has outperformed Ethereum in terms of profitability, according to Leon Waidmann, an on-chain analyst. Waidmann’s statement, shared on X (formerly Twitter), underscores this significant milestone, although it does not consider Ethereum’s value as fuel or a means of payment across various Layer 2 (L2) networks.
Waidmann shared a chart from Blockworks that compares the total economic value from transaction fees and miner extractable value (MEV) generated by Solana and Ethereum between February 14 and May 12, 2024.
The data reveals that Ethereum’s economic value reached an impressive $40 million in late February, followed by a gradual decline with intermittent spikes, eventually stabilizing between $10 million and $15 million by April. However, Ethereum’s economic value further decreased in the two weeks leading up to May 12, closing at just under $2 million.
Solana’s peak value was lower than Ethereum
In contrast, Solana’s peak value was notably lower than Ethereum’s, but it achieved significant highs during the same period. Starting with relatively low values in mid-February, Solana experienced a steady increase throughout March, with several peaks coinciding with Ethereum’s declining phase.
Solana’s values stabilized somewhat higher than Ethereum’s during April, and by the end of the period, Solana surpassed Ethereum, closing at over $2 million on May 12.
Industry experts have weighed in on this development, offering insights into the factors contributing to Ethereum’s decline and the broader implications for the market. Toghrul Maharramov, a contributor at Scroll ZKP, observed that the launch of EIP-4844 led to a decrease in fees, despite Ethereum’s MEV not significantly declining.
Emmanuel Awosika, a technical writer and researcher for Ethereum R&D, clarified that the purpose of rollup scaling was never to redirect revenue to L1, as some might believe. He emphasized the importance of having a valuable native token for rollups, as well as using it for data availability, settlement, and consensus.