- Solana may soon exceed Ethereum in terms of transaction fees and captured Maximal Extractable Value (MEV), according to recent analyses.
- Despite potential to overtake Ethereum in certain economic metrics, Solana’s Total Value Locked (TVL) remains significantly lower than Ethereum’s.
- Solana’s network has faced challenges, such as handling high transaction demands, which has led to multiple outages.
Solana is on the verge of surpassing Ethereum regarding transaction fees and Maximal Extractable Value (MEV), signaling a shift in the competitive landscape. Dan Smith, a senior research analyst at Blockworks, suggested that this milestone could be achieved as early as this week, indicating rapid growth and adoption of the Solana network.
Economic Metrics and Market Impact
According to Smith’s recent analysis shared on X, Solana’s total economic value, which combines transaction fees and captured MEV returned to validators, nearly matched Ethereum’s on May 7. Ethereum recorded a total of $3.165 million, slightly ahead of Solana’s $2.803 million. These figures reflect the increasing activity and value extraction occurring on Solana’s platform, which was originally designed to offer high throughput and efficiency.
Comparison of Transaction Fees and TVL
While Solana’s total economic value is inching closer to Ethereum’s, there remains a substantial gap in daily transaction fees and Total Value Locked (TVL) between the two networks. Data from DefiLlama shows that Ethereum still leads with over $2.75 million in daily transaction fees, compared to Solana’s $1.49 million. Furthermore, Ethereum’s TVL of over $53 billion dwarfs Solana’s $3.94 billion, indicating that Ethereum continues to hold a dominant position in terms of overall locked value.
The Narrative of an “Ethereum Killer”
Since its mainnet launch in March 2020, Solana has been touted as an “Ethereum killer” due to its promises of scalability and low transaction costs without relying on layer-2 solutions. Unlike Ethereum, which has adopted a modular approach to scalability, Solana operates on a monolithic structure that aims to handle all transactions on a single layer.
Technical Challenges and Network Stability
However, Solana’s journey has not been without challenges. The network has experienced several outages, most notably at the beginning of April when a surge in demand for memecoins led to a failure in processing transactions, affecting approximately 75% of transactions at the time. Another significant outage occurred on February 6, when block production halted for about five hours until engineers and validators managed to restart the network.
