Solana's threat to Ethereum: Things may turn around!
The #Solana network is on track to surpass #Ethereum in terms of transaction fees; This is a critical development as Solana is seen as the "Ethereum killer".
The Solana network is on track to surpass Ethereum in terms of transaction fees; This is a critical development as Solana is seen as the “Ethereum killer”.
According to Blockworks' senior research analyst Dan Smith, Solana could reverse Ethereum's transaction fees starting this week: "SOL will flip ETH in transaction fees + captured MEV this month, maybe even this week."
Captured MEV or Maximum Extractable Value mostly refers to profits made through arbitrage in protocols. MEV measures the maximum amount of value that can be extracted from a blockchain by a user or group of users. According to Smith's X post, Solana's $2.8 million total economic value was close to Ethereum's $3.1 million total economic value on May 7:
Defining “total economic value” (give me better names) as total transaction fees + captured MEV returned to validators. Yesterday Ethereum: $3,165,772, Solana: $2,803,313.”
However, Solana's daily transaction fees are still far from those of Ethereum. According to DefiLlama data, Ethereum generated over $2.75 million in fees in the last 24 hours, while Solana's was $1.49 million. Looking at the total value locked (TVL), Solana's $3.94 billion TVL is still a small fraction, or about 7.4 percent of the Ethereum network's over $53 billion TVL.
Solana launched on mainnet in March 2020, with 50,000 transactions per second (TPS), promising to improve Ethereum's lack of scalability and inefficiencies, which has been dubbed the "Ethereum killer".
Unlike Ethereum's modular approach to scalability via layer-2 (L2) scaling solutions, Solana's monolithic approach aims to create scalability and low fees as an independent blockchain network.
