Topic: The Ethereum killer storyline part 2 might be beginning - page 3. (Read 1544 times)

Layer-2s don't need to become Layer 1. There are already plenty of Layer 1s already and it would cost existing layers 2 much more than it would cost them to continue running their layer 2s. At least with Ethereum as the L1 + EigenLayer's shared security, these layer2s can benefit from the security without needing to bootstrap their own security. About the issue of fragmentation of users, that's bound to happen even with L1s. However, the layer2s that can capture the most users and get them using the chain for daily activities like Arbitrum and probably starknet, would win in the long run.

NFT is just one protocol among many others though, Ethereum utility is not lacking, we can see the smart contract being utilized heavily, so many other standard protocol other than NFT still being utilized heavily.
I don't think it lacks any network utility at all.
ETH just falling behind in speed and transaction cost but really if we are talking about utility, it's as good as any other smart contract capable blockchain that just got released recently.
even most of the newer blockchain derived their concept form ETH which ETH also derived its concept from a paper about smart contract.

@Abiky. I very much agree that the layers 2 on Ethereum will give much lower fees, however, there are presently many of them and the projects cannot collect as much users compared if they are on an integrated blockchain similar to Solana.

Also, what does this layer 1 on layer 2 model imply for Ethereum blockchain's value gathering? Uniswap has announced their own layer 2 on Ethereum. This will bring millions in onchain activity and profit from fees to Uniswap's chain and they will only pay less than 10% of their total revenue from fees to Ethereum blockchain very much similar to Base layer 2.



Today, we’re thrilled to announce Unichain. After years of building and scaling DeFi products at Uniswap Labs, we’ve seen where DeFi needs to improve and what’s required to continue advancing Ethereum’s scaling roadmap. That’s why we’re launching Unichain – a fast, decentralized Superchain L2 that’s built to be the home for DeFi and liquidity across chains.

Read in full https://blog.uniswap.org/introducing-unichain

Of course. It's all about convenience. People want low fees and fast confirmations even if that means sacrificing decentralization in the long run. But to those unaware, it's possible to get the same benefits as Solana on Ethereum by using any of its L2 networks. I'm talking about Arbitrum, Optimism, Base, and the likes. You will get the security, reliability, and decentralization of Ethereum without "breaking the bank".

Why switch to another chain with different apps and tokens, when you can stay on ETH and use a L2 for added convenience? At this point, it's hard to believe ETH will loose its position on the market anytime soon. It will remain the second-largest cryptocurrency in the world forever. Solana might even rise all the way towards the third spot. But that's it. "You can't beat the real thing". Not even EOS had success on "killing" Ethereum. Why? Because ETH has first-mover advantage. Just like Bitcoin. See you in the next bull market.

Both are working on something, and that's great.
Would Firedancer be something that would make the SOL chain much better (making many parts of technical processes better)? - definitely.
Would better and cheaper transactions make ETH better for its community? - definitely.
Both have something to work around and both would be leading the alt market, in my opinion.

everyone really knew that ethereum didn't have much network utility once they discovered the NFT's were not on chain. It was a transaction proof they were buying. No use case was discovered by the market.

@Abiky. You are correct that this very positive netflows on Solana is because of the memecoins craziness. However, this is not the 100% of the reason, I reckon. The much bigger reason is certainly because the people that have begun to use Solana pay much lower gas fees and the blockchain is very fast. If Ethereum's gas fees did not increase, will many people in the cryptospace transfer from Ethereum to Solana? I am very much certain that no, we would be on Ethereum blockchain for all of our onchain activities. This also is a supportive argument on the speculation that much of the users presently do not care about decentralization. They only want low gas fees and a fast blockchain.

It's all because of the "meme" coins craze. That, and also the excitement surrounding the sale of Solana's latest smartphone. The project is simply overhyped. It won't last for long. Especially when people tend to move on to the next big thing. Unlike Solana, Ethereum is focused on quality by providing safe and reliable decentralized apps to everyone. Fees may be much higher than Solana, but that's the price you pay for decentralization. You can always switch to many of ETH's L2 networks (Arbitrum, Optimism, Scroll, Base, etc) for complete peace of mind.

If Ethereum goes full speed ahead with the "Danksharding" upgrade, Solana's glory days will be over. ETH will be fast and cheap for payments like in the early days. Just you wait and see. Have faith in Vitalik for once, would ya?

Yes, SOL would be the nearest thing that could possibly beat up ETH in any aspect on which the thing i do like with SOL is that it is fast and have cheaper fees or simply better that on what we are seeing on ETH.
What makes ETH to be the #2 thing is that because of its smart contracts and this is something a feature that cant really be easily be beaten up on any projects out there. Yes, we cant be able to make out some assurance that it wont be overtaken by something on upcoming years to come but there's no guarantee that it will really be able to retain its spot forever, even we do say that Bitcoin would be always have also that tendency on getting replaced. It all matters with the community demand and recognition or simply into its supporters on which we know that this could really be that something that cant really be determined
on when there will be having that switch up in speaking about into the support on where its investors or supporters would really be pouring into. This is why it will really be that important that you should really that know
at least on the probabilities or chances that there might be some flipping in between projects. Therefore, it will really be best that you should really be making out some diversification in between coins/tokens on which you do really believe that it could really be having that potential that might be something big in the future or will really be having that tendency to be sitting in top of the ranks. It will really be just that everything depending into your risks taking and choices on where you would really be focusing into.

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.