Why does Solana win even if Ethereum has an ETF?

Thanks to Bitcoin (BTC) spot ETFs, the cryptocurrency world is full of bullish sentiment. Investors quickly accepted that Ether (ETH) spot ETFs would follow in the coming months.

Many investors have begun to speculate that many altcoins will also have ETFs, which has led to price appreciation and a lot of speculation. But all the enthusiasm has made many to ignore an obvious competitor for Ethereum – Solana (SOL), which has beaten many expectations and continues to boast a sophisticated technology team.

There has been no shortage of stories about Solana and his relationship with FTX founder Sam Bankman-Fried, with many predicting his demise. However, Solana has weathered the storm by a few measures. For example, the number of active addresses on the network has reached 2022. As in 2022, the number of new addresses continues to grow rapidly. In fact, Unique Active Wallets (UAW) will rise from 2022.

Related: 2024 Will Be the Biggest Year in Ethereum Network's History

This is not to mention the fact that active addresses can be used. An alternative measure, namely capital efficiency (ie, the amount of decentralized currency locked in per dollar of total value) suggests that Solana has outperformed Ethereum in recent months.

To be sure, Solana isn't exactly doing well, but it clearly defies the assumptions of many who thought it would collapse after the FTX explosion. A big part of the recovery after FTX, and the growth since then, is driven by seemingly smart leadership, which affects their technology investments, strategy, and ultimately community engagement.

The blockchain technology landscape, particularly at the Layer-1 (L1) level, is currently less transformative than many envision for the future of finance. While the initial promise of blockchain offered a vision of faster, cheaper, more efficient and censorship-resistant financial systems, the reality today presents major challenges.

The fluidity of the L1 landscape is characterized by the fragmentation of various Layer-2 solutions (L2s) and the lack of scale that hinders efficiency and user experience in the decentralized exchange space, and concerns about the degree of centralization in the centralized exchange space. . This fragmentation has led to a fragmented ecosystem where the integration and interoperability necessary for a truly revolutionary financial system is inevitable. As a result, the blockchain community finds itself at a crossroads in search of solutions that can fulfill the early promises of this technology.

Currently, efforts to scale blockchain technology are diverse, with each project taking a unique approach to overcoming limitations of speed, efficiency, and interoperability. The Ethereum blockchain, for example, follows a multi-layer strategy, incorporating both layer-2 consolidation solutions and sharding without sacrificing security to increase transaction flow.

Related: Curb your enthusiasm – crypto prices don't move as fast as you think.

Meanwhile, projects like Cosmos (ATOM) and Polkadot (DOT) are exploring multi-chain architectures that allow unique blockchains to interact and interact. Solana, along with newcomers such as Sui and Aptos, has offered an alternative approach focusing on high throughput and efficiency at its own Layer-1 level. Each of these approaches represents a different way to achieve scalability, finding its own trade-off between decentralization, security, and performance. The diversity of solutions highlights the complexity of the migration challenge and the blockchain community's commitment to finding a way forward.

Solana leaves behind her unique approach to solving the major issues that challenge the blockchain ecosystem and its strong community support – evidenced by its resilience post-FTX and the success of global hackathons, which highlight the platform's strong foundation. And significant UX improvements, especially with mobile integration on Saga phones and competing platforms like Jupiter — a rival to Uniswap — make Solana very accessible.

Solana has demonstrated its ability to moderate finance by last offering 400ms block times compared to Ethereum's longest duration, compared to initiatives like FireDancer and local payment markets. The platform's emphasis on conducting seamless transactions without the need for bridging or consolidating the fragility of liquidity, combined with the implementation of real-world solutions such as Decentralized Physical Infrastructure (DePIN), has made Solana a leader in the blockchain space.

This doesn't mean that Solana is guaranteed to outperform Ethereum or even Bitcoin, but it does mean that Solana is no longer the underdog. And maybe before any altcoin gets an ETF, Solana will have its own which will bring big competition to the blockchain space.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.