Topic: The Ethereum killer storyline part 2 might be beginning - page 4. (Read 1384 times)

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?

Do I smell a little shilling for a certain coin here?

If one coin has positive "netflows" (I guess you mean flows from exchanges to self-hosted wallets and vice versa) and another one negative ones, but the second one is 5* away, then it can take years to catch up, or never.

These flows are also more a sign for what's happening currently and what happened in the past, without much predictive value. Basically as in the last months the Solana flows were positive in comparison to Ethereum, this can be perfectly explained by the price movements of both coins in these months, where SOL did indeed increase relatively to ETH as shown in the graph in one of my previous posts. It could have been undervalued before that movement. But -- by far -- not enough to challenge it in the market cap indicator. SOL would need at least to come close to its old ATH.

Of course this positive SOL/ETH tendency can continue, but it's not sure. I would say there's a 60% probability perhaps that SOL will continue to increase compared to ETH in the next months because of its solid on-chain activity. However, much of the ETH movement can be explained with the negative reaction to disappointing ETF inflows, and this sentiment may bottom eventually.

As an example of the limited predictive value of flows, Glassnode failed with a lot of its Bitcoin predictions based on exchange flows, often its price went up after periods of negative flows, and down after periods of positive flows.

The last info I have is that "classic" sharding was relegated to the long term. In the short term however, ETH is relying on L2s, and rollups like Arbitrum and Optimism were quite successful and have lowered ETH's fees a lot in the last year. And in the medium term, a solution called Danksharding will be implemented, which will optimize the efficiency of rollups.

Maybe it is like SWIFT vs credit/debit cards.

SWIFT is apparently slow but when it comes down to something, somehow SWIFT is still used internationally between banks.

-MarkM-

@Abiky. Also, you might have forgotten an argument that is beginning to be much more agreeable. This argument is the people who use defi, who play games on blockchain, who trade on decentralized onchain exchanges and other types of onchain participants only want to have cheap fees and a good experience. Does Ethereum give this type of good experience? We can be quite certain the answer for this is it ca mot because it is very expensive to use.

On the other side of the argument, why is Solana getting very positive netflows? This is certainly because Solana has attention of the community and very much might continue to have this attention. This forced developers and venture capitalists to invest their time and money on bringing more development on Solana than on Ethereum, I reckon.

Nobody cares about the damaging effects of centralization. Everyone just wants to make money. Investors buy a coin with the hopes of turning a profit in the long run. Only true crypto enthusiasts and libertarians are interested in decentralization. Solana may be centralized, but it's far superior than Ethereum in terms of performance and cost-efficiency. Of course. This leads to network stability issues in the short term. Why do you think Solana has been a constant victim of network outages? Ethereum has been running smoothly since day one. I know there was a "rollback" of Blockchain transactions in the past. But it was all done in good faith to help protect investors. Miners agreed to it, and developers made the move.

You won't find any other altcoin as reliable as Ethereum is. The high fees and slow confirmation times is the price you pay for unmatched decentralization, security/reliability, and censorship-resistance. Same goes for Bitcoin. Any project that claims it's the next "Ethereum Killer" would be nothing more than overhyped. Remember EOS? That used to be the "Ethereum Killer" until people got tired of it and moved on to the next big thing. I'm guessing history will repeat itself with Solana. Just you wait and see.

Does this imply that Solana is very much undervalued or it might be Ethereum is overvalued? If this positive netflow on Solana will continue while the negative netflow on Ethereum will also continue then it appears that the market capitalization on one of these blockchains is a mistake hehehehe.

Also, what is the latest news update on Vitalik's sharding? Is he continuing this to be his solution for scaling Ethereum?

Even though there are also other good candidates in this regard but I also think that Solana is far better than them. It is because it is also bulkier other than just being popular and has the same use case as ETH.

It is sad to know that there are devs who are only after the money, in a way that they will dump most of their coin/tokens supply but even them, they also believe on their project that it will rise in value because that is the only way for them to profit. I do not know if it's really true that ETH dev (Vitalik Buterin) is dumping its ETH to the max level but even if let say yes, I'm still quite impressed to the fact that he keeps on developing it and didn't drop his project right after profiting just like the others out there.

Yes, you may be correct that some investors and developers may not care about centralization risks.

However, Solana has still to do a huge amount of catching up with Ethereum. A *5 of the market cap -- assuming that Ethereum price doesn't increase anymore -- isn't an easy task for an already somewhat established altcoin like SOL which is currently struggling to reach even towards its old highs of >$200. I think it could be easier if Solana had some "real" technical advantage which was impossible to copy on ETH without changing it completely. But ETH itself is moving towards a layer-2 fueled high TPS model via its rollups.

I think if SOL achieves to get at least close to 30-40% of ETH's market cap, then the technical concept to achieve high TPS will probably be discussed ferociously in the altcoin community, and the winner could depend on the answer which one is "better" "objectively". And I think that a L2-fueled model is indeed superior as simply it has overall inferior costs and can scale much, much better. On a L2-fueled blockchain in theory each citizen on the earth could release their own token. The tradeoff - complexity - can be hidden via the interface once the tech matures.

For me it would be interesting what happens if SOL (or any other "ethereum killer", TRX for example is growing much faster than SOL but has a lower marketcap) and ETH come closer though, if ETH is able to defend its position or if ETH investors tend then to panic and sell more coins when the #2 status is seriously challenged. I'll be eating popcorn at the sideline

Well I suppose that as long as this planet is what the Traveler RPG would call "balkanised", government is itself decentralised, not sure if that makes it "fair enough then" though.

-MarkM-

On centralization and higher transactions per second, I very much understand and I very much agree on the argument. However, my argument is that it appears that no one is anymore considering this as an issue. After Ethereum's DAO hack, the argument for developers presently is if a blockchain is attacked or hacked, the development team can reverse transactions and continue very much like nothing has happened hehehe. Also, development teams can hire lawyers and they appear to that they can get help from the government to prosecute hackers.

In any case, we can witness that developers, users, investors, venture capitalists and other people causing high net inflows on Solana do not anymore care about some centralization. They want a blockchain where they can use it cheaply and create projects that are not restricted by low transaction capabilities.

Maybe "don't beat them join them" could come to mind here?

Things like GRouPcoin, DeVCoin, IXCoin, I0Coin, heck even NaMeCoin, by merged-mining alongside bitcoin, seem to present a possibility of provisioning a bit of bandwidth for themself and not actually competing with bitcoin but, rather, simply offering its miners some potential extra income?

I have not tracked what has been happening with merged mining alongside litecoin but maybe it is time for the original scrypt coins, TeneBriX and FairBriX, to look into merged mining too if they didn't already?

-MarkM-

I was there for the flippening and rippening moments and none of them happened and a lot of Ethereum and Ripple fanatics have abandoned the idea for now because they have bigger problems competing with these newer horses like Solana/SUI/aptos, etc than to compete with Bitcoin and lose (again).

Having high TPs right now is a meme because everyone knows that if any of these chains handle anywhere near the volume that Bitcoin or Ethereum faces, they'll bend the knees as well. Solana itself has been down close to 5 times over the years and they had to *restart the blockchain * to get it work again.

No problem


Source: Coingecko

The violet line is the SOL/ETH price, the orange line SOL/BTC and the light blue line SOL/USD.

We can see here clearly that SOL has indeed grown a bit compared to ETH this year, and it is close to the SOL/ETH all time high. However, the growth is not enough to even see a "flipping" in the smartchain market on the horizon. Ethereum's market cap is almost five times higher than Solana's, despite of the relative loss.

And since March Bitcoin has outperformed both ETH (by a lot) and SOL (slightly, and with some volatility).

I chose the "max" view to put things into perspective: SOL had a very high growth in 2023, but the reason is simply the fact that from the 2021 high it fell extremely low (95% loss). It's however true that SOL is currently one of the few Ethereum killer chains of the "second tier" which has made some progress lately in the "Ethereum killing" process. The other one is Tron (TRX). Avalanche and Cardano for example are stagnating, and BNB and TON in my opinion are "company coins" and thus do not really compete with ETH nor SOL which can be described at least as semi-decentralized.

One that is growing lately is SUI, a coin afaik derived from Facebook's failed Libra, but it's still relatively far away (ranking currently at #25) and I don't know if the smart contract capabilities are comparable to the EVM chains.

That does sound like a server most people won't feel likely to run in their own home, which means not having control of physical access and possibly not even knowing the skillsets of those who do have physical access enough to judge whether any are technical-skilled enough to be a potential threat if left alone for a moment with a virus medium or left long enough to reboot using a boot media, thus yeah, sounds too centralised alright.

As to how the values have been lately too bad you didn't put a nice vs-bitcoin chart like you have on other occasions done.

-MarkM-

The discussion about TPS is missing the point that TPS is always a function of centralization. The more TPS a layer-1 blockchain claims to allow, the more capacity/bandwidth/CPU/RAM requirements for full nodes. You have to pay a quite high performance computer already to operate an Ethereum full node, but with Solana "at full capacity" it is even worse. Solana compared to Ethereum has basically the same relation as BSV to Bitcoin.

For a simple SOL node you already need 128 GB RAM and a 12-core CPU and a 10 Gbps network connection, so called "RPC nodes" (which are the real full nodes) need even more. ETH "only" needs a 16GB RAM computer (see here), while a Bitcoin node can run still on the year-long standard of 4MB RAM. SOL claims to have >4000 nodes, but that number seems to include light nodes (correct me if I'm wrong here) which process the blockchain in real time but don't store it fully.

Ethereum is increasing its capacity via Layer-2's, like Bitcoin, and this is the way to go IMO. Not every tiny speculative memecoin transaction or every cup of coffee bought has to be recorded by all full nodes on the world. It's just a matter of resource allocation. I'm myself not a big Ethereum fan but even less a Solana (and even less a BNB/Tron) supporter.

If really Solana had discovered a breakthrough in bandwidth usage that can often be adopted by other blockchains like ETH and BTC too.

I also distrust predictions from such an "objective"    source like VanEck which are those who have applied for an US Solana ETF.

And at $143 SOL is quite far away from its ATH of $260 (current price is 55% of its ATH). Not much more than Ethereum (currently $2450, ATH $4800, so it's at 51%).

It is very headshaking to compare Ethereum and Bitcoin because they have very different capabilities and use cases heheheh. They will only be comparable if smart contracts, DeFi and NFTs will be very much active in Bitcoin which would certainly be quite an annoyance for much of the people who use and hold Bitcoin. We can be very certain of this and we have witnessed this when Ordinals had a few months of popularity.

However on Ethereum, they experience this everyday and they will experience this until much of the people will stop using it. Also, your argument change does not the reality that much of netflows are going out of Ethereum and they are going to Solana.

Yes. Seeing a founder dumping his own coins, tells me he stopped believing in it. At least, that's how I see it. Litecoin founder Charlie Lee, did the same. The only one who's still "hodling" is Satoshi. Who are we to judge, anyways? Whenever we like ETH or not, it's the one cryptocurrency that started the Web 3.0 craze. Without it, we wouldn't have decentralized apps, tokens, NFTs, etc.

I know ETH is expensive and slow at times, but no other altcoin can outmatch its level of security and reliability. If developers continue to work on it, nothing will stand on its way. Hopefully, ETH improves enough to handle a large number of transactions per day. L2 networks are just a short-term fix. The future is unpredictable, so I'd hope for the best.

High fees happen in bitcoin too, it does not necessarily mean the layer zero is shaky or insecure, rather it might indicate quite the opposite.

If ultimately the zero layer is to be where the multi-billions-fiat value balances of payments between "civilisations" and other forms of billionaire and trillionaire and such are to take place, maybe all the block space it will really need is one transaction per year or so per multibillion layer 2 network as the big "civilisations" et al balance with one-another's net trade gain or loss at their year-ends, and maybe the free transaction part of each block (if there even is such a part anymore?) offers occasional slots for other layer-2s that have backlogged enough transaction volume, rollups etc to find it worth trying to get a transaction into a layer-zero block.

If people are actually willing to pay high fees, as evidenced by those fees are getting paid, that seems to me to imply someone is actually valuing the chain they are paying such fees to get a transaction into...

-MarkM-

to be fair, Solana also has occasional unlock, but it's small enough for it to be relevant, but yeah, Ethereum's founder dumping ethereum just give pessimistic impression to the holder.
I also personally hold some amount of ETH back then now completely shifted my portfolio to solana, though I'm also waiting for it to dump as well to add some bags.

honestly, not really interested in ETH anymore, the fee problem still as annoying as ever added with the massive L2 that's spreading the liquidity to various L2 chain making TVL spread thin.

at some point, I really believe that solana will truly replace ETH if this keeps up though.