Armand Sirignan
Solana finally beats Ethereum, but there's one thing to consider
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On May 12th, Solana created more total economic value (TEV) than Ethereum in one day.This is the first time in its history that Solana has outperformed Ethereum, but always catch.
Data breakdown
According to Blockworks Research, on May 12, Solana generated $2,248,681 in TEV, outpacing Ethereum's $1,977,416. TEV is a combination of transaction fees and miner/extractor value (MEV). TEV is often used to analyze the utility and adoption of blockchain networks.
Commenting on the whole thing, former Ark Investment analyst Chris Burniske said we should focus on L1, which continues to expand every year in the form of TEV. A higher TEV may indicate increased usage and demand, which increases the flexibility of the network's economic policy.
There is a problem
However, this achievement has sparked debate between Solana and Ethereum users. Critics argue that it is misleading to compare Solana's TEV to Ethereum's TEV without considering Layer 2 (L2) solutions. L2 solutions are built on Ethereum to enhance scalability, reduce fees, and effectively offload some of the activity while retaining important parts of the main Ethereum blockchain (L1). As one commenter pointed out, “Since some ETH activity has moved to L2, shouldn't we include that? Hey Chris, if you're not taking L2 into account, this is just disingenuous. ”
Despite the criticisms, it is still valuable to compare TEV across blockchains. As Burniske explained, each L2 operates in its own blockspace environment, and TEV comparisons are typically done on an L1 vs. L1 basis. However, some may disagree with such an approach and consider L2 to be an integral part of a larger ecosystem like Ethereum, which has struggled in the past due to high fees. For now, Ethereum fees can be lower than Tron fees.
About the author
Armand Sirignan
