Solana (SOL) has recently been making waves in the blockchain world, emerging as the fastest blockchain and surpassing Ethereum (ETH) in Total Economic Value (TEV) for the first time. Solana's performance, comparing it with other major blockchains and the critical debate points surrounding its achievements, are highly tackled in the below article.
Why is Solana (SOL) the fastest blockchain?
According to a recent CoinGecko report, Solana (SOL) is currently the fastest blockchain, processing over 95 million transactions in a single day and boasting an average of 1,053 transactions per second (TPS). This performance outstrips Ethereum's 22.8 TPS and Bitcoin's 10.7 TPS significantly. Other blockchains like Sui, BSC, Polygon, TON, Tron, Near, and Avalanche lag, with TPS figures ranging from 854 to 89.
On April 6, 2023, Solana reached a peak performance of 1,504 TPS, driven by a surge in meme coin transactions. This is 46 times higher than Ethereum's TPS and more than five times that of Polygon, the fastest among Ethereum scaling solutions. Despite these impressive numbers, Solana's peak TPS is only 1.6% of its theoretical maximum of 65,000 TPS.
Solana achieves such high throughput and low latency through a combination of unique features, including its novel proof of history (PoH) timestamp mechanism, the Turbine block propagation protocol, and parallel transaction processing. According to Solana's founder, Anatoly Yakovenko, the primary design goal was not just maximum throughput but also swift state synchronization globally.
How did Solana (SOL) Surpass Ethereum (ETH) in Total Economic Value?
On May 12, Solana achieved another significant milestone by generating more Total Economic Value (TEV) than Ethereum in a single day. TEV, which includes transaction fees and miner/extractor value (MEV), is a crucial metric for assessing a blockchain's utility and adoption. Solana generated $2,248,681 in TEV, surpassing Ethereum's $1,977,416.
Chris Burniske, a former Ark Invest analyst, highlighted the importance of monitoring blockchains that maintain high annual TEV growth. Higher TEV indicates greater usage and demand, potentially offering more flexibility in the economic policies of the network.
What is the unrevealed secret to Solana (SOL) surpassing Ethereum (ETH)?
However, this achievement has not been without controversy. Critics argue that comparing Solana's TEV with Ethereum's without considering Ethereum's layer-2 (L2) solutions is misleading. L2 solutions are designed to enhance Ethereum's scalability and reduce fees, offloading some activity from the main Ethereum blockchain (L1) while remaining integral to its ecosystem.
Commentators suggest that to fully understand Ethereum's performance, L2 activities should be included in the TEV comparison. Chris Burniske responded by explaining that TEV comparisons are typically made on an L1-to-L1 basis, as each L2 operates in its own blockspace environment. Nonetheless, some critics view L2s as inseparable from the larger Ethereum ecosystem, complicating direct comparisons.
Solana's impressive speed and recent surpassing of Ethereum in TEV highlight its growing prominence in the blockchain space. While debates about the inclusion of L2 solutions in TEV comparisons persist, Solana's advancements underscore its potential to shape the future of blockchain technology. How will this affect its current price?
