Ethereum
“Cheap” Solana May Topple Ethereum “This Week” – Analyst
- Solana is quickly catching up with Ethereum on the fee front.
- However, the Ethereum ecosystem still enjoys investor confidence.
THE Solana [SOL] against. Ethereum [ETH] The debate has resurfaced on Crypto Twitter following reports that the former could soon unseat the latter on the fee front.
According to on-chain analyst Dan Smith, Solana was quickly approaching Ethereum in terms of transaction fees. Black-smith claims that,
“Solana will return Ethereum in transaction fees + captured MEV this month, maybe even this week”
Transaction fees refer to fees related to network activity, while MEV refers to the highest value of validators derived from maximizing block production or “confirmation.”
Solana vs Ethereum: Fees and Other Fronts
Smith supported his argument with data, noting that there was a difference of around $300,000 between Solana and Ethereum fees.
Source: X/Dan Smith
The chart shows that Solana saw a significant increase in 2024, closing most of the gap with Ethereum.
AMBCrypto review of Artemyz data confirmed the trend on the fees front. Data showed that Ethereum network fees had declined significantly since late February.
On May 7, Ethereum fees reached $2.8 million, while Solana had $1.6 million.
Source: Artemyz
However, other market observers have argued that Ethereum transaction volume should include all L2s to capture its “real value.” To which Dan Smith responded:
“The question is whether pushing activity to L2s where ETH, the asset is used as currency, brings enough value back to L1 to compensate for the loss of L1 activity.”
Despite its network challenges, Solana has cheaper transaction fees on average than Ethereum.
Reacting to Smith’s projection that SOL would eclipse ETH, crypto analyst Ansem request,
“And transactions are still 100x cheaper for users, really think about it and explain to me in detail why ETH is still worth 5x more in terms of market cap”
Things are also moving on the DEX (Decentralized Exchange) front after Solana’s Jupiter exchange outperformed Ethereum’s Uniswap on the Unique Active Wallets (UAW) front.
Like Ansem, most market observers have pointed out that SOL is grossly undervaluedespecially after last week’s decline.
Nevertheless, Ethereum had a considerable lead in TVL (Total Value Locked) and overall token value on the price charts.
Solana held $4 billion in TVL, while Ethereum’s figure stood at $53.3 billion at press time, highlighting that Ethereum has more investor confidence.