Recently, Solana has led Avalanche, NEAR and other layer 1 public chains to dominate the market, and the market has heard voices of killing Ethereum. Indeed, ETH Killer was the trump card narrative held by most public chains in the last bull market.
However, at a time when EVM dominates the market and layer2 has not yet exploded, narratives such as MEME and DePin alone are not enough to shake ETH's market position. This is just a short-lived carnival of Alt-Layer1 before the Cancun upgrade. Why?
1. The narrative that major public chains are competing to kill Ethereum has been fully verified as "failed" by a round of bull-bear cycles. On the surface, this is due to Ethereum's strong market consensus, the innovative power of the developer group, and the magic of the infinite combination of DeFi and NFT financial applications.
In fact, because the Crypto market is still limited by factors such as technology, market, and compliance and has not achieved large-scale mass adoption, the technological "leap" brought about by these new public chains has not become a means to stimulate new narratives and expand new market growth, but is merely reaping the spillover dividends of Ethereum.
Public chains such as Solana, Avalanche, and Aptos want to thoroughly improve their technical level from the underlying frameworks such as development language, code complexity, and operation mechanism to provide better infrastructure for the application market. For example, Solana's high concurrent processing performance and user experience UX advantages are indeed more suitable for the future incremental Crypto market in terms of technology alone.
However, the basic operating logic of the market has not yet truly changed.
Risk-seeking hot money, a market audience eager for the code to wealth, constantly updated and diverse ways of playing, ever-existing information gaps, occasional stories of getting rich quickly that spill over from the circle, etc., these perfectly constitute the basic elements of a cyclical bull market.
This means that Ethereum, which has "innate limitations" in technology, has been able to patch up its shortcomings with various EIPs, ERC standard protocols, etc., which is enough to derive a huge application market, and also allow other competing public chains to emerge frequently simply by relying on spillover effects.
But everyone is reaping the benefits of the Ethereum DeFi market, and it is not yet time for Alt-layer1 to easily replace and surpass Ethereum.
2. Ethereum’s “congenital defects” have already explored a complete set of mature solutions, such as the expansion problem, which has evolved into various solutions such as Rollup, Plasma, and Validium; another example: the EOA address limitation has also been upgraded by ERC4337 Account Abstraction, and even evolved into an account abstraction track;
In addition, layer2 has also become a narrative track, with OP-Rollup and ZK-Rollup engaging in a continuous tug-of-war, etc.; in the future, there will be the upgraded Blob space in Cancun, as well as the more distant Sharding sharding and underlying SNARKization to provide support for subsequent development;
Even the potential DA capacity limitation problem caused by the upper limit of block capacity has led to the optimization of DA based on Restaking solutions such as Eigenlayer, and then through modular combination of third-party DA solutions such as Celestia, as well as optional alternatives to the VM execution layer, etc.
The development, expansion, and extension environment of the entire Ethereum is mature and prosperous enough. The developer power behind it is the cornerstone of the Ethereum's continued success.
Although Ethereum’s continuous efforts to build an ecosystem through Lego stacking have not yielded the expected results over the past few years, it has been able to complete the key upgrade from POW to POS amid frequent hacker attacks, and has been able to focus developer resources on the main line centered on Ethereum EVM, and has evolved into a more ambitious layer2 narrative. The potential for Ethereum’s future should not be underestimated.
Believing in Ethereum is a respect for Ethereum's solid consensus over the years, and also a respect for the huge developer group Builder behind it.
I vaguely remember that at the end of 2018, EOS claimed to be a new paradigm public chain and set off a wave of gambling games, but everyone has seen the actual results. After the short-lived prosperity, it was the slow but steady Ethereum that had the last laugh.
To discover true value, you must capture it slowly.
3. The building speed of Layer2 is indeed slow in the bear market, especially without a round of big market gifts in Layer2 Summer, which makes everyone involved in the construction of the Layer2 ecosystem feel a little unwilling.
However, the slow speed of layer2 building is similar to the fact that Ethereum’s DeFi narrative has spilled over to major emerging public chains. The second half of Ethereum layer2 will rely on some high-frequency transactions and application drivers. Relying solely on the spillover effect and path dependence of Ethereum’s financial gameplay, it has no advantage in a head-on confrontation with Alt-layer1.
On the one hand, OP-Rollup such as Arbitrum and Optimism have the first-mover ecological advantage of layer2 and have expanded their market territory under the Stack strategy. However, these strategic expansions are ultimately B-side layouts. OP-Rollup needs to solve the criticized centralization problem and drive the growth of the C-side market.
On the other hand, ZK-Rollup such as zkSync and Starknet has more advanced technical advantages, but ZK is also a technology focused on the future, and the existing user base cannot fully demonstrate the power of ZK. Only when the user base is expanded, can Gas be reduced to negligible and the experience become smoother, which is the final form of ZK layer2.
In addition, the mid- and low-end forces in the layer2 market are making moves. For example, Metis is trying to use Hyper (OP+ZK) Rollup technology to make a POS decentralized sequencer, changing the incentive method of tokens (governance -> practicality), etc. In addition, shared sequencer solutions such as Espresso and Astria are also continuously expanding the potential of the layer2 market in the form of Rollup as a Service.
Don’t think that OP+ZK has finished telling the story of layer2. In my opinion, the Layer2 War has just begun, and the real involution of the layer2 market may only start after the Cancun upgrade. When the Cancun upgrade time is finalized, isn’t the collective rise of layer2 an emotional release for the current layer2’s aggrieved situation?
When the narrative scenario of the application chain opens in the future and the situation of Mass Adoption is opened, the funds, users and DApp applications that can be accumulated in the layer2 track will definitely be more stable than other Alt-layer1.
4. Of course, speaking out for the Ethereum ecosystem at this moment does not mean denying Solana’s market potential. It is undeniable that Solana’s starting point for technological innovation is indeed higher than the existing blockchain architecture. Whether it is its storage and computing separation characteristics or its high-concurrency transaction processing characteristics, it makes it very user-friendly and easier to build an ecosystem.
Take DePin as an example, physical infrastructure + token incentives, which has been repeated in the vortex of failure in the past, such as Filecoin Arweave. I don’t know whether it will really succeed on Solana, but DePin happened on Solana, so I have more confidence in DePin. After all, the technical starting point of high concurrency is naturally connected with web2, which is different from the ecological logic of combining modules.
Solana's current rise is, on the one hand, the window of opportunity brought by the short silence of Ethereum layer 2, and on the other hand, the result of a group of active development forces on Solana. But what needs to be corrected is that Solana's goal is not to kill Ethereum, it is actually looking for a "blank" point in Ethereum and waiting for an opportunity to break through. If it has made some achievements and has an ecological equivalent to Ethereum, it can only be on par with it at most, how can it replace it?
Ethereum will inevitably be impacted by some Alt-layer1 chains with brand-new technological starting points, but none of them are Ethereum "killers". I prefer to call them web3 breakthrough innovators.
Ethereum has already achieved success in DeFi financial applications and a huge combinatorial ecosystem, and the new journey of layer2 and layer3 in the future is still on the way.
If Ethereum, which is “open, inclusive, trustworthy, and combinable”, cannot ultimately realize the value of blockchain, I find it hard to believe that a new chain will.
