In the "Election Coin" PK, Ethereum once had the upper hand. Can memes help Solana surpass ETH?

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

After Trump's assassination, for many meme players, what might be more regrettable than not rushing to memes like FIGHT and FEAR NOT earlier is rushing to the wrong chain.

As the recognized meme king among public chains this year, Solana, despite having a first-mover advantage over Ethereum's similarly named memes in this round of popular election-themed memes, was once overtaken.

During the period from July 14 to July 16, the FIGHT and FEAR NOT memes launched on Solana were about three hours ahead of their Ethereum counterparts. However, after three days of fermentation, the market capitalization and peak growth of the Fight and FEAR NOT memes on Solana were once inferior to those on Ethereum.

Data from July 17 showed that the market capitalization of FIGHT and FEAR NOT on Ethereum reached $68 million and $20.5 million, while the same memes on Solana were only $12.5 million and $1.6 million, respectively.

Currently, the election-themed coins are still fermenting, and the outcome is uncertain. The emergence of similar rare narrative meme coins may still pose a dilemma for meme players regarding whether to rush to Solana or Ethereum.

The competition between meme coins on the two chains has also been elevated by many crypto users to a contest between the two most notable public chains, Solana and Ethereum.

Why Did Ethereum Temporarily Gain the Upper Hand in the "Election Coin" PK?

Behind the success of each meme are numerous accidental factors. Even if the themes are the same or even the teams and manipulators are identical, vastly different outcomes can occur, making it difficult to attribute them simply.

But for the two popular election-themed coins, Fight and FEAR NOT, which share the same narrative and have similar starting points, why did they perform better on Ethereum for a time? Some crypto KOLs have shared their views.

Firstly, in terms of interactive experience, the creator of the Bit Puppet Chinese community, shaqima (@Daji_357), believes that the interactive model on Ethereum currently covers most of the crypto circle, with available tools including various swaps, wallet flash exchanges, and centralized exchanges (under the premise of being listed). Solana's infrastructure is not as comprehensive, which deters most of the traffic.

Secondly, there is a difference in the attributes of meme players on Solana and Ethereum. Trader @Kurolvi feels that Solana, which has hosted most memes this year, has cultivated a group of players with small casino attributes who are accustomed to the fast-paced PVP mode of mutual liquidation.

In contrast, the memes on Ethereum have a greater sense of security with secondary funding support, and the probability of meme coins emerging after hot topics is also higher.

@Wilsonchen1101 shares a similar view, noting that many buyers of memes on Ethereum's mainnet are not just degens (high-risk gamblers) from the crypto circle. "If you often participate in overseas spaces, you'll find that there are many more players on Ethereum who care about politics and major events in the real world than on Solana."

Additionally, political inclination may also be one of the reasons why this round of election coins is more active on Ethereum, as public chains may also need to take sides.

Crypto KOL @0x_Todd speculates that in the last U.S. election, one of Biden's largest political donors was SBF, who is a key investor and supporter of Solana, and SOL can barely be considered a so-called "Democratic asset." Naturally, election coins related to the Republican Trump are not suitable for appearing on Solana.

In fact, apart from Fight and FEAR NOT, other previously popular Trump-themed concept memes like Trump and MAGA have also been more active on Ethereum. The Biden-themed meme coin BODEN is active on Solana.

Before the final results of the U.S. election are determined, election-themed meme coins are expected to spark waves of excitement.

Although the recent popular election-themed memes have shown greater participation on Ethereum in terms of market capitalization and maximum growth, meme players still have different choices regarding whether to rush to Ethereum or Solana for the same-named meme coins.

The short-term wealth effect brought by Solana in the past continues to attract players' bets.

@neso states that currently, the market capitalization of meme coins on Solana is several times lower than that of the same-named memes on Ethereum within just one day, which is unusual but also an opportunity. He chooses to continue increasing his position in FIGHT on the Solana chain, saying, "As long as FIGHT can become the next true gold meta, its value will not be low, whether on Ethereum or Solana."

When a rare narrative similar to Trump's assassination appears next time, @Daji_357 mentions that when faced with options like ETH, SOL, RUNE, or others, he may prioritize investing in tracks with better ecological infrastructure.

Nathan (@26x14eth), co-founder of 7updao, suggests that if you believe a meme coin has blue-chip qualities, then prioritize choosing one on the Ethereum chain. If you think this meme is just a low-quality coin, then prioritize choosing one on the Solana chain.

The Public Chain Competition Behind the Meme War

The debate over whether Solana or Ethereum represents the future of public chains has never ceased. The meme frenzy driven by this election has also been elevated by some crypto users to a contest between the two public chains, Solana and Ethereum.

The core debate centers on whether memes can help Solana surpass Ethereum's market capitalization.

Throughout this entire bear-to-bull cycle, Solana has made a full recovery after the FTX collapse, with its price rising from less than $10 to a peak of $200, an increase of more than 20 times, while ETH has only increased by more than three times. Among them, memes may have contributed the most to Solana's revival.

The differing performances of popular election-themed meme coins on the two chains have also led many crypto users to reassess the future of both public chains.

Some crypto users still believe that memes will bring a flywheel effect to Solana.

Although the popular election-themed memes have performed well on Ethereum, crypto user @MichaelLars9 believes that most meme trading volume still occurs on Solana, and memes are bringing real users and real growth to Solana, which is also shouldering the banner of large-scale growth of crypto users for the third time.

Specifically, looking at the trading volume on July 16, the trading volumes on Solana and Ethereum were roughly equal, both around $1.9 billion. However, in terms of the composition of trading volume, most of the trading on Solana is from memes, while 90% of Ethereum's trading occurs on Uniswap, where the first screen mainly features "mainstream" large coins or stablecoins, and the trading volume of meme coins not listed on centralized exchanges is only in the tens of millions of dollars.

@MichaelLars9 believes that memes, compared to mainstream coins, essentially bring player growth on the chain, while mainstream coins are merely taking a share from users of centralized exchanges.

On the other hand, "if we look back at the three large-scale growth phases of crypto users, they have basically all been driven by token issuance financing." For example, the emergence of ICOs from 2017 to 2018 drove the rise of Ethereum, while the driving force behind the DeFi Summer of 2021 came from Uniswap V2, which facilitated the speculation of new tokens on decentralized exchanges (DEX).

@MichaelLars9 believes that the third phase is the massive demonstration effect brought by Solana's meme gameplay. "If ETH and the entire EVM ecosystem cannot find a breakthrough for mass adoption beyond memes, it may only be a matter of time before Solana's price and even its entire market cap catch up with ETH, as users continue to gather here, and ecological construction will eventually catch up."

Shanghao Jin, co-founder of Zen Family Office, also agrees with this view, stating that token issuance is the essence of the crypto casino, and ETH relied on ICOs back in the day.

However, crypto KOLs like @xingkongsq have countered this.

Firstly, memes do not necessarily lead to real user growth. @xingkongsq believes that meme players are not loyal, have extremely high liquidity, are neither value investors nor ecological builders, and are more like gamblers in a casino.

Although the volume and trading of meme coins on Solana are large, the high loss rate means that this group of gamblers also has a high elimination rate.

@xingkongsq mentions that if memes are the main theme, Solana needs to maintain MEV and trading volume by continuously acquiring customers through marketing to ensure that public chains and project parties make money, during which users' funds are consumables.

"To use an inappropriate analogy, if solely guided by memes, Solana is now the best casino, providing gamblers with more gambling options, more convenient entry points, and lower commissions. If it remains this way, Solana's ceiling will be the annual revenue of a casino, which is a visible limit."

Crypto analyst @Phyrex_Ni also believes that whether it is Ethereum or Solana, if the value of the chain relies on memes for support, it may not be sustainable in the long run.

In his view, a market that relies solely on memes for support may not be a healthy market. Just like Nasdaq, if over 90% of the trades are in junk stocks, it will eventually become a place that no one wants to play in, as how many compliant market makers are willing or able to provide liquidity for such projects.

@PhyrexNi states that memes can only be a tool to attract traffic, and the possibility of leveraging memes to tap into a trillion-dollar market is too low. Crypto KOL @chengzi95330 adds that the massive crypto market must be driven by phenomenal applications, requiring certain traditional sectors to actively embrace cryptocurrencies to improve efficiency.

Not only in terms of memes, but the question of which is the true public chain between Ethereum and Solana has always been a focal point in the crypto market.

In June of this year, Bankless initiated a large debate between Solana founder Anatoly Yakovenko and Ethereum Foundation researcher Justin Drake, discussing their respective advantages and disadvantages regarding technology and ecology, attracting debates and alignments from founders of well-known projects like Uniswap and Eigenlayer. However, this debate ultimately did not yield a clear winner.

As the most trafficked content this year, memes have also become an important strategy for major public chains. However, for public chains, memes are not everything; innovations beyond memes also need more attention.