- Solana becomes the third largest cryptocurrency.
- Speculation mounts that Ethereum’s position is under threat.
- Arthur Hayes backs Ethereum over Solana.
Solana’s meteoric rise reached new heights this week as it breached a staggering $92 billion market cap, solidifying its position as the third-largest cryptocurrency, excluding stablecoins. Fueled by the explosive popularity of native memecoins like DogWifhat and BOME and surging total value locked (TVL) in its DeFi protocols, Solana has captured the imagination of crypto enthusiasts.
This remarkable run has ignited fervent speculation that Solana could dethrone Ethereum as the world’s leading altcoin. However, in a recent interview with Anthony Pompliano, BitMEX co-founder Arthur Hayes dismissed talk of Solana being a threat to Ethereum’s dominance.
Ethereum Still Number 1 for dApps: Hayes
Hayes’ conviction in Ethereum’s enduring dominance over rivals, such as Solana, stems from the platform’s robust and dedicated developer community, which he considers unparalleled. Additionally, dApp “primitives” invariably make their debut on the Ethereum blockchain before any other network, noted the former BitMEX chief.
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While Hayes acknowledged that these primitives may eventually branch out to other layer-1 blockchains, perhaps due to network congestion or prohibitively high gas fees on Ethereum, their genesis remains firmly rooted within the Ethereum ecosystem. “You’re not seeing a new primitive emerge on non-ETH chains first,” he asserted.
This precedence of Ethereum as the launchpad for pioneering decentralized protocols is a key factor underpinning Hayes’ belief in ETH’s long-term supremacy. However, he conceded that should this dynamic shift, with a novel smash-hit protocol debuting on a rival chain, it would force him to reevaluate his position on Ethereum altcoin dominance.
Solana Making Moves
Despite Hayes’ dismissal of Solana’s threat, the burgeoning blockchain has significantly challenged Ethereum’s altcoin dominance. Over the past seven days, decentralized exchange (DEX) volume on Solana narrowly surpassed that on Ethereum, with $19.45 billion in trading activity compared to $19.36 billion on the latter, as noted by Solana Floor.
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This milestone is further bolstered by Solana’s surging total value locked (TVL) in 2024, which has skyrocketed 170% from 2.2 billion SOL on January 1 to 5.96 billion at present, according to DeFiLlama data.
Leading the charge for Solana is the Marinade protocol, a yield optimization platform for SOL staking that currently boasts a staggering $1.9 billion in TVL. It is closely followed by Jito, another staking protocol redistributing maximal extractable value (MEV) profits to investors, with $1.65 billion locked.
On the Flipside
- X influencer “Cardano YOD₳” argued that Solana‘s rising popularity is due to short-term effects such as airdrops, reboots, and VC money.
- Solana has a reputation for network instability, with the most recent outage occurring on February 6.
- Hayes acknowledged that Solana dApps have the best UI and UX in the industry and believes the token will be a “very good performer” this cycle.
Why This Matters
Dethroning Ethereum as the leading altcoin would trigger a seismic shift in the crypto landscape. While Solana’s ascent has been meteoric, Hayes’ unequivocal backing of Ethereum instills confidence in its future roadmap and continued developer commitment. Nevertheless, as Hayes aptly noted, emerging a single groundbreaking dApp on a rival layer 1 platform may be all it takes to alter this dynamic.
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