The "argument" between Solana and Ethereum sparks heated discussions, how does the community choose sides?

Author: Joyce, BlockBeats

On June 3, Bankless released a video titled “ETHEREUM VS. SOLANA: Which Blockchain Wins 2024 & Beyond?,” featuring Solana founder Anatoly Yakovenko and Ethereum Foundation researcher Justin Drake discussing their views on the Ethereum and Solana ecosystems. This nearly two-hour debate from the crypto community has garnered significant attention in overseas circles.

The two most talked-about ecosystems in the crypto industry showcased their controversies in a direct dialogue format in this video, allowing even ordinary community users who may not be familiar with the technical details to sense the "temperamental differences" between Ethereum and Solana.

As community user Phoenixzen83 summarized, SOL represents "practicality, execution, action-oriented, user obsession, realism, early failure/fast/iteration/improvement/pushing boundaries/seeking PMF, application/product-centric," while ETH represents "academic, idealistic, simplicity, strict in all edge cases, focused on infrastructure, slow and steady movement/real-world tested security."

Dragonfly founder Haseeb, Messari VP of Product Jimmy Skuros, and others have shared and recommended this video. Delphi Digital founder Tommy even provided an AI summary for this video, leading to many derivative discussions within the community surrounding this debate.

This article organizes the video content and outlines relevant discussions worth noting within the community.

What Topics Were Debated?

For the crypto community, the technical and ecological rivalry between Ethereum and Solana is a well-trodden topic. However, in this video, Bankless set the discussion agenda into four segments: "good, bad, ugly, final." The two representatives sequentially articulated their optimistic views on the Ethereum and Solana ecosystems, pointed out temporary and solvable shortcomings within the ecosystems, expressed what they believe to be the irreparable flaws of the opposing ecosystem in the "ugly" segment, and concluded with a "closing statement" outlining the ultimate vision for their ecosystems.

"Good":

1. Justin praised Solana's high throughput, low fees, good user experience, widespread adoption, and strong financial performance, considering it a healthy competition that can accelerate Ethereum's development.

2. Anatoly commended Ethereum's large distributed node network and robust security guarantees, believing it surpasses the simple majority honest assumption.

"Bad":

1. Anatoly criticized Ethereum's EVM design and the split between L1 and L2, arguing that this leads to friction among developers and fragmentation of liquidity.

2. Justin contended that Solana's design, with its short block times and low slot-to-ping ratio, could lead to centralized time attacks by validators.

"Ugly":

1. Justin believed that Solana's isolation from Ethereum's network effects limits its potential.

2. Anatoly argued that Ethereum's focus on "ultrasound money" makes it difficult to derive value from execution/transaction fees.

"Final":

1. Anatoly believed that Solana would optimize hardware/bandwidth improvements to provide the fastest and cheapest global state applications.

2. Justin argued that Ethereum's network effects and composability make it the dominant "value internet," while Solana has a small chance to surpass its position.

Key Debate Points:

1. Whether high token issuance or inflation would impose additional costs on the network or users, especially considering that staking rewards may be subject to taxes. (Justin believes so, while Anatoly disagrees).

2. The importance of economic security in blockchain networks and the cost of a 51% attack (Justin considers this issue critical, while Anatoly views it as a meme).

3. Solana's low slot-to-ping ratio may lead to centralized risks of timing attacks (Justin believes this will lead to centralization, while Anatoly disagrees).

How Does the Community Stand?

Matthew Sigel, Research Director at Van Eck (supporting Justin):

The winner is Justin; although it was a hard-fought victory, it is still a Pyrrhic win.

1. The economic security issue is not a joke. Drake is right; economic security is crucial, and Toly's attempt to deny this is foolish. If 51% (or 66%) of the staked assets are controlled, a significant amount of locked value could be seized in an attack. Economic security is vital.

2. Tax issues will indeed create some selling pressure, as the tax obligations arising from staking rewards may force holders to sell tokens to pay taxes. This is seen as a cost to the network, similar to how miners use Bitcoin to pay for mining costs (like electricity).

3. The discussion about MEV on Solana's short block times leading to more centralization is very interesting but needs empirical discussion to gather data. As we understand, Ethereum has 7,200 blocks per day, while Solana has 216,000 blocks. Each block grants sorting rights. Winning these blocks becomes easier if you are very close, as you have an information advantage and can gain the "last word" in block auctions. Theoretically, this advantage only applies to the last part of block transactions, such as 100 milliseconds.

For Solana, 1/4 of the blocks provide a latency advantage, while for Ethereum, it is 1/120. Speculatively, you have more opportunities to capture latency-sensitive MEV because you have more blocks. This means short block times give those with extremely low latency many opportunities to better rearrange blocks. This should lead to centralization, as the best builders will win. This explains why, in our model, MEV constitutes a larger share of SOL revenue than ETH (68% vs. 38%). This is by design.

4. Justin mentioned that cryptocurrency is interdisciplinary, not just technology-driven, which is important. Toly's approach is simply to build the fastest and best; perhaps Solana's virtual machine can be deployed as L2.

5. Justin mentioned validators as decentralized sorters for MEV capture and Ethereum's fee capture. We are uncertain how L2 (and token holders) will reach consensus on this. Additionally, cross-L2 compatibility will require all L2s to migrate to ZK technology, which may take some time.

Sreeram Kannan, Founder of Eigenlayer (neutral):

Both Justin and Toly are right; we still lack good metrics.

1. Solana's shorter slot times do indeed lead to less MEV (as Toly said); but they also lead to more timing games (as Justin said).

2. Ethereum's L2 roadmap bets on ETH as a "programmable decentralized currency," with its security covering all L2s. Toly is right on this point. But as Justin pointed out, based on sequences and real-time proofs, all value accumulation can be brought back to L1, based on the utility of synchronized combinations. Toly did not respond to this value proposition.

3. The EVM and other virtual machines maintain neutrality in L2 roadmap design, as long as zk proofs can be written in EVM.

4. On the economic security issue, both immediate security and liveness are necessary.

5. Toly seems to believe that liveness attacks are limited to MEV extraction. Due to validator censorship, the total value of all lending markets, decentralized stablecoins, DEXs, fast options protocols, etc., is at risk. This is because the security of a DeFi protocol relies on L1's liveness. The same applies to optimistic Rollups. Therefore, for the economic security of these DeFi protocols, the total staked amount should exceed the total amount on these protocols.

6. Regarding the issue of TVL versus trading volume, both metrics are eroded by reward chasing (the latter is easier).

Hayden, Founder of Uniswap (neutral):

Support Justin in long-term thinking, support Toly in short-term applications.

1. I agree with Justin's point that "trading demand will far exceed what we see today." I agree with Toly's point that "Ethereum's biggest obstacle is the uncertainty of long-term value of DA and the uncertainty regarding the 'Ultrasound Money' vision."

2. I support Justin in terms of network effects, research, and long-term thinking; I support Toly in terms of applications, engineering, and short-term thinking.

3. I have no opinion on the discussion of token issuance and costs; it feels like the debate there is more about terminology and definitions, not substantive issues.

4. Of course, we need to expand discussions in both areas; the seamless state machine of Ethereum and the single state machine situation of Solana are both worth attention.

Richard, Founder of Tesnor (supporting Anatoly):

To some extent, economic security is indeed a meme.

1. Anatoly (Solana) believes that the execution phase is key to value accumulation. Good engineering design is more important than economic security, as economic security may mask design issues.

2. Justin (Ethereum) believes that lightweight clients should be possible. In the final state, economic security is indeed important.

3. I agree with the view that "economic security is a meme," as in some cases, measuring the network's security by marking the total locked value (TVL) of inflation as market value is not enough to compensate for poor token design or engineering design in some projects. The Terra project can be referenced as an example; the inflationary TVL does not fully reflect the true value of the network.

4. However, if the external value on a PoS chain far exceeds the honest majority's stake, "vitality attacks" may occur, exploiting vulnerabilities in network liveness for attacks. Although currently, most external values on PoS chains have not exceeded internal values, this situation may change in certain cases.

Christine Kim, Researcher at Galaxy (supporting Justin):

The lack of long-term thinking is why SOL cannot catch up to ETH in valuation.

1. The MEV aspect is the most interesting to me; the question of whether marginal validators can benefit from co-location is actually a form of centralizing power or an insignificant force, which even ETH stakeholders are trying to solve.

2. I agree with Anatoly that economic security is a "meme" for pos blockchain networks, and that a roadmap centered on aggregation leads to fragmentation and low L1 revenue. But in my view, Justin Drake's ultimate idea allows ETH to have the most compelling network effects, which is also why Solana may never catch up to ETH in valuation.

3. After all, cryptocurrency valuations are rarely based on fundamentals.

Trader Vapor (supporting Toly)

Comparing Ethereum over the next 20 years to current Solana is merely wishful thinking.

1. Justin's main argument supporting Ethereum still revolves around TVL, brand, reputation, and network effects. He claims "Ethereum's ecosystem excels in quality, while Solana's ecosystem excels in quantity," arguing that the market cap of a single meme coin ($SHIB) on Ethereum is equivalent to the total market cap of all meme coins on Solana. Ethereum is a thriving and interconnected ecosystem, while Solana is a remote Pacific island, isolated within itself.

2. Justin discusses Ethereum's millions of TPS and the "synchronous composability" between L2s as if it has already been achieved. I am surprised at how weak the argument from one of Ethereum's main developers is. All of these (reputation, brand, TVL) are not moats; comparing Ethereum over the next 20 years to current Solana is merely wishful thinking.

3. In fact, Ethereum's value is actively being mined by L2 sorters on the execution side and DA protocols on the DA side. L2 is an isolated ecosystem that destroys the killer applications of smart contract platforms, namely composability.

4. The only things left are memes like Ultrasound Money, ETFs, and the "legitimacy" of $ETH assets compared to $BTC. This is still a lot, but all of this does not rely on the technology itself; it partially involves belief.