Topic: The Ethereum killer storyline part 2 might be beginning - page 2. (Read 963 times)

Yes, there is currently a conflict between "ETH as an investment" and "ETH as a successful smart contract platform".

ETH tokens' value does not directly benefit from L2's. So those in the ETH community which are more focused on the "investment" aspect (the "ultrasound money" camp, as @chainlinkgod puts it) are now angry with L2.

The "problem" is that it's a zero sum game: either you get more burnt fee tokens, or you get a more scalable platform. While they of course could fine-tune the fee (and perhaps also the PoS reward) algorithm, this would not move away the general dilemma.

I personally think the ETH folks should focus on the platform aspect. That's where they got big, and if they want to stay at #2, they shouldn't try to increase fees in any way or make L2s less attractive, only because they want a slightly less inflationary ETH token. So in the discussion I generally support Crypt0Gnome's position.

However, what both are missing is that ETH as a base token also perhaps needs new use cases, so it should not "only" be considered a gas fee payment means. This may be challenging as the "gas token narrative" has been upheld since the start.

I think this discussion is really interesting as it shows the discussions Bitcoin could also be heading into when BTC value eventually moves to L2s like it did on Ethereum. Bitcoin however has an advantage there: its base token is conceived as "digital cash" or "digital gold", but not as a "gas token", so BTC on L2s will be probably much more popular than the ETH token on L2s, where it's not really necessary as Zach wrote correctly.

There are always new coins coming along that are touted as Eth killers. So far none have lived up to the hype & Eth is still the number two cryptocurrency, after Bitcoin. Potentially Solana could compete with Eth eventually but at the moment I don’t see any existing option as an imminent threat to Eth.

It appears that if Ethereum will pump, Solana will pump higher and if Solana will dump, Ethereum will dump lower. This behavior has caused Solana to again reach another all time high against Ethereum. This is not a representation that Solana's price is being pumped, I reckon. This is showing everyone the reality that Solana is presently absorbing market share from Ethereum.

I am very much aware this Ethereum killer storyline is only something created by cryptonews media for clicks and attention, however, it very much appears that if this will continue, Solana might become no.2 in the cryptospace.

@d5000. On your speculation on DeFi using bitcoin, this will certainly be the biggest market pump that everyone in the cryptospace will witness if the bitcoin maximalists can be convinced to stop hodlong and begin to use their coins to participate in certain usages. However, there will be a gambling characteristic for this hehehehee. I reckon much of the hodlers very much discourage gambling and tell everyone to be like them, only hodlong.

Also, @chainlinkgod has written something on why the argument for ETH as the gas token for layer 2 is starting to crumble.



The thesis for “ETH is the gas currency of L2s” is starting to crumble, exactly as predicted and ahead of schedule

No I’m not bearish ETH, the economics of being a “gas token” just has zero moat and will be 100% abstracted away

L1 coins needs to be more than just gas money (SoV + cash-flows)

Yes I know this is a Paymaster solution and not native USDC gas payments, but we’re well on that way

Source https://x.com/chainlinkgod/status/1844907015740801141?s=12&t=fx2RmsbaS0qNJTJTdpNu2w



With Ethereum’s revenue dropping by 99% YTD, the ETH community has been experiencing an identity crisis of sorts

Namely, what is the primary method that ETH will accrue economic value?

In the “ultrasound money” canp, it’s all about revenue, more fees -> more burn -> deflationary supply -> number go up

But with EIP-4844 reducing DA costs for L2 rollups by multiple orders of magnitude, existing L2s now pay almost nothing to settle on Ethereum (at times less than 1% of fees generated)

Activity shifting from the L1 to the L2s means the baselayer has also been forfeiting MEV/sequencing revenue to the L2s, which their centralized L2 sequencers retains

Source https://x.com/ChainLinkGod/status/1832198208287863174

@bbc.reporter: Oh, you're correct, I had missed one of your posts on the first page. So I have to apologize

To add a personal opinion: I think currently the Ethereum killers in general have too much in common for one really to stand out. ETH has mainly the first mover effect, but network effect is already been challenged by Solana, albeit only in the short term. Solana has however still the problem with network outages. I think until this is not solved it will be difficult to catch up.

In general I agree however that there's the possibility that a different "season" could begin once the ETH challengers come closer.

Perhaps there will be even an unexpected competitor - Bitcoin itself. With BitVM it would not only be possible to create contracts with Turing complete characteristics but also Layer-2's without any additional consensus.

I don't think L1 contracts on Bitcoin will accrue too much importance due to Bitcoin's limited block capacity, but I can imagine a mid-term future with a lot of Bitcoin L2s with enhanced smart contracting capabilities and low fees. If Rootstock (RSK) for example moved to a decentralized BitVM-based model, they would bring already an existing ecosystem with them, so Bitcoin's smart contract landscape doesn't start from zero.

This could -- you'll be surprised to hear that from me -- even benefit Solana, at least for some time: if Bitcoin and Ethereum move both to L2-based paradigms, SOL's L1-focused paradigm would begin to stand out even more. Bitcoin with smart contracts running on rollups and sidechains would be similar to Ethereum's current emerging paradigm and thus this could challenge ETH's value proposition more than SOL's. However, as I already wrote the "everything on L1" paradigm is more expensive (for node validators) and inefficient (as a system) so I'm sure that in the long run SOL would also move to a L2 based model, losing its (sorta) unique feature.

@d5000. You did not see? The website on Artemis was shared already with the image of the netflows hehehehe. I was shaking my head on why you were implying that these netflows might not be real hehe. In any case, yes, there are cautious warnings for the Ethereum Foundation that Solana might get more marketshare from Ethereum. I hold cryptocoins of Ethereum and Solana, however, I am more bullish on SOL's price for this bull market.

On integrated approach vs. modular approach, I reckon there are advantages and disadvantages. But I am not arguing this. I am only speculating on netflows and what it might imply on Solana or Ethereum, if they are overvalued or undervalued. I reckon only the market can answer this.

Thanks! That's what I wanted to see I may not have found that metric because I was googling for "netflows" without a space

Yes, that numbers look indeed good for Solana, and if they sustain themselves then I agree that Solana may be approaching a new "season". I've played around a bit with the parameters. If we look at the past month alone (1M view) it seems that Ethereum had again more net flows than Solana. But that is of course only a short term picture, it will be interesting to observe what happens in the next months, if the big inflows into Solana were only due to the mid-year memecoin craze or if they can be sustainable.

An "integrated approach", i.e. a "big block" coin like Solana, can be attractive to create new tokens and contracts because of the lower complexity than a L2 (rollup) based approach. I continue to think however the L2 approach is superior because it simply isn't necessary to store every transaction on all nodes. Once L2s mature there should be possibilities to hide the L2 complexity from the end users. Even on Solana there seem to have appeared "network extensions", which are sort of L2s.

Interesting article on that subject: https://unchainedcrypto.com/are-solanas-network-extensions-just-like-ethereums-layer-2s-but-by-a-different-name/

I think L2 on ethereum is popular at the moment, with many using it, with the increased performance it is worth the effort, with layer 2 solutions making it easier for obtained  to build according to the needs required, because the process prioritizes speed.

I am not declaring that these are hard facts, however, if you were paying attention to what I was saying, I was speculating that this Ethereum killer storyline will have different seasons very much similar to a show on televsion. Read my original post.

Also, the only data I can provide as an argument that Solana might be the Ethereum killer is the data on netflows from this website.

https://app.artemis.xyz/flows

On Ethereum's high fees, if there are community members who like their high fees then this will certainly strengthen the argument for faster blockchains. Their rollup roadmap also appears to have become an opportunity for Solana to argue for an integrated approach and it appears to be working based on the positive netflows, venture capitalists are increasing, transactions are increasing, the community is growing and SOL/ETH is increasing. Let us eat the popcorn for the tv show hehehehehehhee.

I feel L2 on Ethereum better than many of the Ethereum killer. Though the fragmentation is hurting adaptation, Ethereum L2 are cheaper and faster than many other options and Ethereum Blockchain insures decentralization. Just tried Injective EVM, it happens in seconds and the fees are not even a cent for 10s of transactions.

No, of course. But it would make your point a bit clearer and more convincing if you provided some hard facts - completely independently from if you're a shill or not.

No, this was not an attempt to "weaken the argument", here you misunderstood. It's only that I am not interested enough in that metric to pay the package which includes "netflows", But as you do seem to have access (or know the numbers from another source), I've asked you to publish at least some examples for the netflow growth on SOL and the negative flows on ETH here. It hasn't to be a pic, only the % over the last month or so ...

I don't think that's bad. I know some Ethereum shills like their high fees on ETH because then many ETH get burnt in transaction fees and they think ETH gets "more scarce" due to this. However, if the ETH mainnet fees lower due to activity moving to rollups, then it will be again more attractive to move value on-chain on Ethereum's L1. This can have positive effects, and eventually will lead to a new equilibrium.

Compare that with Bitcoin, if people used Lightning more, then it would be better for those who like to transact on-chain, and I'm sure half of the forum would be happy.

That only seems bad if for some reason the "victim" was not freely able like anyone else to "hold" the "vampire", so maybe you are in essence pointing out that one chain ought to be able to hold shares in another as it were; if that capability existed then the main chain only suffered due to its failure of foresight to invest in the rollup project.

If the capability did not exist, then oops looks like you have pointed out a possibly rather important feature a chain/platform needs.


-MarkM-

Heheheheh some of your arguments are headshaking because you only make it appear that you are weakening the argument, however, it does not weaken this. Does an accusation that someone is a Solana shill really make the question of netflows and valuation of a chain invalid? It clearly does not make the question invalid.

Also on your other attempt to weaken the argument on netflows, if the source is a paid package, are you implying that the data on that website is not real? The negative netflows on Ethereum are not happening? Hehehehe another headshaking argument.

On Ethereum rollups, there are some people in the cryptospace who are beginning to speculate that these rollups might become vampire attacks on Ethereum mainnet. There was an article about the rollup of Coinbase where it earned $2 million in fees and it only paid onchain fees of $20,000 on mainnet.

On Ethereum vs. Solana and who will be no.2, I will certainly be watching. I am holding them hehehehhehehehe.

I repeat: arguments are normally more convincing if there are hard numbers backing the claims, and even a "shill" can be convincing in this case . That's what is missing here in this thread regarding your argument based on netflows. The indicator seems to be part of paid packages from on-chain analysis firms, and it's also not easy to find journalistic articles about the phenomenon you describe. The article you cite at the beginning doesn't mention it. So I'd appreciate (seriously!) if you can post some stats or charts here

I have seen some on-chain data like active addresses that look indeed very positive for Solana in the short term. But the timeframe for the observed growth, which is probably also what the VanEck report mentioned when it talks about "user base", is too short to be an evidence for undervaluation. If fees are low then also the potential for manipulation or use for useless tokens/data (as everybody can see on Bitcoin SV). And again, to compare with ETH you'd have to compare the whole ecosystem, including rollups and other "ecosystem chains" like Polygon.

btw: If anything I'm a Bitcoin "shill" or "bagholder", and a happy one (not only because of the recent price increase) If there's an ETH/SOL war about rank #2, then I'll be eating popcorn watching from the sideline

Heheheh it will not weaken the argument because your accusation that someone is a shill for Solana will certainly imply that you might be an annoyed bagholder of Ethereum. This will only distract everyone from the real argument which is based on netflows and what might happen to the future of Solana and Ethereum because of these netflows.

On overvaluing Ethereum and undervaluing Solana, I speculate that big investors and whales might have begun to notice these netflows and they are considering Solana to be undervalued if this is compared to Ethereum which might have a waiting value gathering problem because of rollups. The evidence of this is the growing community of developers, venture capitalists, investors and users.

Decentralized-in-name-only-proof-of-60%-premined-stake scamcoin that pretends to protect its non-existent decentralization with tps limit struggles against another scamcoin better at decentralization theater. You reap what you sow.

"you know right now bitcoin transaction costs 5 cents which is fine right now because paypal's fees are even stupider but the internet of money should not cost 5 cents a transaction its kinnda absurd" -2017 vitalik buterin

It seems to me that puts the blame onto the marketing industry.

It seems generally to be an industry that lacks sufficient faith in its own acumen.

I always find myself thinking why should I pay some marketer who claims to be able to make a coin soar if that marketer has too little faith in their actual ability to do so to simply go ahead and do so.

The programmers had enough faith in their own coding ability to write the free open-source code, why do the marketers lack sufficient faith in their own skills / abilities to go ahead and do their part?

I dealt with a marketer back when I was involved in setting up Mountnet Internet ISP in Halifax NS way back when (before search engines, basically) and one notable thing about the marketing department was what to actually offer for sale even is up to them apparently so there ya go, it is marketers job to figure out what to sell, get hold of some of it, and get out there selling it.

If teams won't listen to marketers to the extent of altering their product to become something the marketers figure they can sell, fine, lots of teams around, marketers can shop around to pick products they can sell.

So it seems to me it is probably more the marketers lack of faith that is the problem, they should be right in there snapping up dirt cheap coins and reselling them at much higher prices; maybe we need futures markets so the marketers can secure in advance a supply so that when their efforts do multiply the value they will still be able to pick them up themselves at known ahead of time prices to keep on selling them and presumably keep on multiplying the prices of them.


-MarkM-

Not that I'm aware of. EOS always had little demand and low network activity. It is now long lost and forgotten. This is the fate of all projects associated with Dan Larimer. Remember Bitshares and Steem? Their concept was good, but without a proper marketing strategy, investors will just look elsewhere.

If EOS (which was often proclaimed as the next Ethereum killer) failed, what can you tell me about Solana? It's overhyped, often becoming a victim of network outages. The only reason why hype hasn't faded away yet, it's because of the "meme" coins craze. Since SOL is fast and cheap to use, whales and speculators can use the chain to "pump" memes for profit. It will never beat Ethereum, no matter which shiny-new features it gets in the long run. To say Ethereum will fall, it's like saying Bitcoin will lose traction until it's superseded by another cryptocurrency. That will never happen. There's nothing wrong with holding coins other than ETH or BTC, though. The point is to make money, right? Just buy low and sell high for complete peace of mind.

At least it weakens the argument a bit and thus the arguments needs a bit more substance

When I shill for a coin (and I do shill for decentralized coins like XMR, LTC or so) then I'll usually provide some hard numbers to back up the claims. So you can do the same thing and your argument becomes stronger

Okay, thanks for explanation.

Now to answer your question about undervaluation: this metric seems to be indirectly related with value as a long term indicator for usage (these coins "could" eventually be part of the SOL demand), but not directly, because the value can simply stay inside the stablecoins without ever being converted into SOL. Many users might be simply using stablecoins on Solana due to the lower fees but would never exchange them to SOL.

A possible strategy to answer the question about undervaluation would be to compare the stablecoin trading volume on SOL versus the SOL price evolution. If the growth of this volume is higher than the price increase, then  I would say that SOL could be undervalued. The reason is that the stablecoins are actively traded for SOL and thus can indeed form part of the demand, and not only hodled in stablecoins (or used for stablecoin payments).

But as I wrote in the last post Solana has a long way to go to catch up to ETH in terms of market cap, so a long period of positive flows into the ecosystem would be needed.

Another interesting metric would be the value of all (or at least, all relevant, i.e. perhaps the top 50) tokens on ETH compared to those on SOL, including all second layers. If SOL's network value approaches the one of ETH then a "flipping" is possible in the medium/long term.

Are you implying that if you accuse that a person was shilling a certain project then the speculation on what chain is overvalued or overvalued based on netflows is invalid? Hehehe this is very much headshaking.

Also, netflows described that total value of stablecoins that are exiting or entering the network. There is also smart contract netflows shown in Artemis where Arbitrum and Ethereum have the largest negative netflows and Solana has the largest positive netflows.

@Abiky. You have mentioned Dan Larimer's EOS. Did EOS have this much positive netflows similar to Solana?