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Solana Co-Founder Raises Questions about Ethereum’s Ecosystem Vitality
The Growth of Base Layer 2 Solutions
Solana’s co-founder, Anatoly Yakovenko, has recently brought up concerns about the sustainability of the Ethereum ecosystem in the absence of contributions from Base, a Layer 2 solution. This comes as Base, a Layer 2 solution, has shown significant growth in user activities and transaction volumes.
Base has experienced remarkable growth in key metrics such as Active Addresses, Transaction Count, Throughput, Stablecoin Market Cap, and Total Value Locked (TVL). This surge is also attributed to the integration of Base Layer 2 with Coinbase’s large user base, driving demand and boosting these metrics.
The rise in Base’s activity is also linked to the popularity of meme coins such as MOG and BRETT, which have gained traction within the ecosystem. These coins have climbed to the top 100 cryptocurrencies by market cap and are approaching their peak values.
According to DefiLlama reports, Aerodrome Finance has played a significant role in the surge of Base’s TVL, with memecoin trading serving as a major driver. The platform has contributed to $1.36 billion TVL on Base Layer 2, fueling rapid growth.
“So basically without Base, Ethereum ecosystem would be dead in the water right now.”
However, on-chain economist Lily Liu has raised concerns about how active addresses are visualized, suggesting that the grouping may be misleading. Liu points out that Solana reports significantly higher monthly active addresses, around 100 million, compared to the 22 million reported by Base, indicating an inaccurate representation of ecosystem activity levels.
Liu recommends a more precise method of data presentation, proposing a single bar chart with EVM and non-EVM bars shaded differently for clearer distinction and accurate comparison. She notes that the claim of “Base and Solana” having the highest monthly active addresses overlooks that the NEAR Protocol has 31 million MAA, surpassing Base.
Impact on Ethereum’s Market Position
On the contrary, Ethereum has faced challenges post its Dencun upgrade, marked by inflationary supply and declining revenues. In contrast, Base Layer 2 has seen significant growth, capturing a notable share of transactions and revenues, positioning it as a prominent player among Ethereum’s Layer 2 solutions.
The diverging performance between Ethereum and Base underscores the evolving dynamics in the blockchain ecosystem. Layer 2 solutions are evolving into standalone ecosystems with distinct communities and economic activities.
At the moment, ETH price stands at $2,678, showing a 7-day increase of 2%. The 24-hour trading volume has surged by 68% to $19.68 billion, reflecting heightened trading activity and investor interest.
Furthermore, Anatoly Yakovenko has shed light on the differences between Solana and ETH, noting that despite Solana’s technological advantages, it has not garnered the same institutional attention as Ethereum. He highlights that the contrasting scaling methods of the two platforms, hardware scaling for Solana and software solutions for Ethereum, could impact institutional interest.
Conclusion
The growth of Base Layer 2 solutions poses questions about the sustainability of the Ethereum ecosystem without contributions from Base. As Base continues to grow and attract users, it highlights the changing landscape of Layer 2 solutions in the blockchain space.