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This is the Aspen Digital newsletter — delivering new digital assets market insights to your inbox every week.
TLDR;
- Ethereum and Solana are the two largest DAPPs ecosystem in the digital asset space.
- While Ethereum retains its leadership in crypto ecosystem, Solana is closing the gap with strong user growth, robust DeFi activities and huge momentum in memecoin trading.
Ethereum vs Solana is one of the most widely debated topics in crypto. In a recent podcast, Bankless invited Justin Drake (an Ethereum researcher) and Anatoly Yakovenko (Co-founder of Solana) to debate on whether Ethereum or Solana will be the winner in the layer-1 blockchain race. In this week’s newsletter, we offer a non-technical comparison between Ethereum and Solana, such as network metrics, DeFi ecosystem and future roadmap.
Source: Artemis Terminal
For layer-1 blockchains, core metrics to monitor includes market cap., protocol revenue and user growth. Ethereum is the 2nd largest cryptocurrencies with $404B market cap., almost 7x of Solana’s. For revenue, it equals total fees generated minus supply-side fees (e.g. rewards paid to miners or validators). Ethereum outpaced Solana in both fees generated and protocol revenue.
On the contrary, Solana significantly outperformed Ethereum and other layer-1 blockchains in transaction activities and user growth. For Ethereum, the majority of users are recurring users and the growth stayed flat in the past 3 months. However, new users accounted for half of Solana’s user base in the last quarter. This is primarily driven by DeFi activities on Solana, such as trading memecoins in decentralised exchanges and participating on token launchpads.
Ethereum vs Solana: New vs Returning users comparison
Source: Artemis Terminal
Source: Artemis Terminal, DeFillama
*Calculation based on median daily active user
Ethereum remains the largest player in the DeFi ecosystem, with a 62% market share (in TVL). While Solana is only 7% of Ethereum’s TVL, it has 7x more daily active users per protocol. This indicates a more engaged and organic user base in Solana. In addition, DEX daily trading volume on Solana flipped Ethereum several times this year, due to memecoin trading such as Dogwifhat (WIF) and BONK.
DEX trading volume comparison between Ethereum and Solana
Source: Artemis Terminal
Ethereum and Solana take different approaches in scaling their ecosystem. Instead of building directly on Ethereum, most new projects are choosing to build on layer-2 scaling solutions or EVM-compatible chains. The Ethereum community prioritises to bring better user experience and cheaper transactions on layer-2 scaling solutions (e.g. EIP-4844 in March).
On the other hand, Solana continues to bring tech enhancements (e.g. Firedancer for transaction processing) and ship user-friendly applications (e.g. Blinks) on its own chain. Both Ethereum and Solana ecosystems are growing rapidly in the current bull cycle, ultimately accelerating Web 3 adoption.
- Near Protocol: 2024 H1 report
- Zeta Market: Airdrop and future development
- VanEck filed Solana ETF application in the US
- Glassnode: Bitcoin Sharpe Signal Short
- Liquity V2: An Introduction
Stay tuned for our weekly updates!
About Aspen Digital
Aspen Digital is a full-service digital asset wealth tech platform backed by Everest Ventures Group, TTB Partners and RIT Capital Partners (formerly Rothschild Investment Trust). Aspen Digital operates across both digital assets and private markets, and offers a broad range of digital asset investment opportunities and tailored services. On private equity investments, Aspen Digital provides clients with exposures to a number of landmark deals, for example Asia’s most high-profile digital asset unicorns, Animoca Brands and Dunamu (the parent company of the biggest South Korean digital asset exchange Upbit).
