Why the “Ethereum killer” narrative may be back in Solana’s favor

• Solana’s recent milestones seem to have created discomfort within the Ethereum clan.
• While Ethereum L2s thrived with TVL, Solana pointed to its TPS.

A few years ago, when Solana [SOL] launched, the Ethereum [ETH] community was thrown into chaos. The obvious reason for the disarray was because Solana, which combines the Proof-of-Stake (PoS) mechanism and Proof-of-History (PoH) entered the ecosystem, and was performing functions that ETH users were hoping that Ethereum would. 

Read Solana’s [SOL] Price Prediction 2023-2024

Ethereum still cannot boast about the speed and low transaction costs that Solana offers. But unfortunately for Solana, these metrics were not the only factors in becoming the “Ethereum killer.”

While Solana excelled with speed and low costs, the project found it difficult to keep its network stable. In fact, between 2021 and 2022, the number of Solana outages worried the crypto community.

The battle of the vain metrics begins

But 2023 has been one of Solana’s best years as AMBCrypt reported in a number of articles. As a result, the conversation around taking Ethereum out has risen again. One of the reasons the discussion picked up again was Solana’s DEX volume.

The DEX volume is the total amount of crypto traded on a DEX within a specific period. According to on-chain analyst Patrick Scott, Solana’s DEX volume has been skyrocketing. Scott also referred to the recovering Total Value Locked (TVL).

DEX Volume on Solana exploding the past few days.

Important to note that Solana’s volume over the past 24 hours has been nearly 3X its total DEX TVL ($424M vs $153M). In comparison, other major chains have less 24 hour volume than TVL.

High volume/TVL should push fees higher,… pic.twitter.com/6Q0XkQsmvU

— Patrick Scott | Dynamo DeFi (@Dynamo_Patrick) November 3, 2023

The TVL is a metric that measures the value of assets locked or staked in a protocol. The higher the TVL, the more trustworthy a project is perceived to be, and vice versa.  Scott also mentioned that Solana has the potential to attract more liquidity because of that.

Meanwhile, another conversation appeared on another end of X (formerly Twitter). This time, it was Ethereum Maxi Ryan Sean Adams criticizing Solana’s growth. Adams opined that, despite Solana’s milestone, every other Ethereum L2, had a higher TVL than it.

Every layer 2 is under $10 billion right now while solana floats above $22 billion.

If you compared SOL with OP, ARB, and MATIC then SOL would be…

1st in market cap yet 3rd in active users and 4th in total locked value.

Do with this what you will.

I know what I’m doing. pic.twitter.com/iWJIwPK4XJ

— RYAN SΞAN ADAMS – rsa.eth (@RyanSAdams) November 3, 2023

Examples of Ethereum L2s are Optimism [OP], zkSync, and Arbitrum [ARB]. These projects were developed as scaling solutions for the project while offering low exchange fees, and faster transactions.

Where do SOL and ETH stand?

However, Mert Mumtaz, CEO of Helius, quickly rebuffed Adam’s opinion. For context, Helius is Solana’s leading Remote Procedure Call (RPC). An RPC is a type of computer server that allows users to read data on the blockchain and send transactions to different networks.

Mumtaz told Adams that the TVL was a “noisy” metric. He also pointed out that SOL had a much higher Transaction Per Second (TPS) than Ethereum. Adams said,

“TVL and active addresses are easily gamed, noisy metrics — especially in the context of people who farm L2 airdrops Solana does more TPS than all those combined while being 100x cheaper and having a much larger community.”

The TPS is the maximum is the maximum number of transactions that a blockchain can carry out in a second. At the time of writing, AMBCrypto’s investigation showed that Solana’s TPS was 65,000.

However, according to ETHTPS.info, none of Ethereum’s L2 came close to Solana with respect to the metric.

Source: ETHTPS.info

There were also other comments which did not agree with Mumtaz’s position. As the Helius CEO said, other ETH maxis also responded that the TPS was a vanity metric. With respect to SOL’s price, Cryptonary, a data-driven trader, noted that the $37 region needs to hold strong to prevent another plunge.

Realistic or not, here’s SOL’s market cap in ETH terms

In the long term, the analyst noted that Solana has the potential to grow exponentially. He opined that the $32.50 to $33 could be a good entry point.

What’s Next for $SOL | Solana Analysis

What goes up must come down, or at least in the case of Solana, pause to catch its breath.

SOL is finally having that major pullback after skyrocketing more than 100% in two weeks. Where is SOL headed next? Let’s find out.

Technical… pic.twitter.com/tVpbEJjEFD

— Cryptonary (@cryptonary) November 3, 2023