Ethereum will become the global financial pillar, 5 reasons why SOL cannot surpass it

Original Title: “There'll be one global backbone - Ethereum”

Author: ryanberckmans

Compiled by: Block unicorn

Ethereum is the core blockchain for L2 and L1 applications in the new global financial system, and no other chain can compare to it. Mert (CEO of heliuslab and an OG in the Ethereum community) once suggested that Solana could transform into a core blockchain, but Solana can never become a core blockchain. Here are five reasons why.

Four years ago, Ethereum shifted its focus to becoming the core blockchain for L2 and L1 applications in the new global financial system. Ethereum's core blockchain strategy is increasingly seen as a top-tier L1 strategy and a wise move—despite still being in the early stages, signs have already begun to emerge, such as imitation being the sincerest form of flattery, and L2 is taking the lead.

This season, Solana has performed well in decentralized finance (degen) and meme growth, as well as in SOL prices. However, I believe Solana's leadership has begun to see the trend of L2 encroaching on alternative L1 market share. Now, they seem to suggest that Solana could also transform into a core blockchain like Ethereum.

But Solana is fundamentally unsuitable as the core blockchain for L2 or world-class L1 activities. I will explain the reasons in detail next.

First, let’s explore how Solana's leadership seems to gradually acknowledge that Ethereum's L2 core blockchain strategy is excellent and that Solana may pursue a transformation to become a core blockchain.

Initially, Solana claimed it would become so fast and cheap that the entire world would use a single Solana chain. This was their "monolithic" period, which was their promoted concept until it became a burden (because in the world, there is no single entity that can serve the entire world), after which they shifted their marketing strategy to the concept of "integration."

Then, in mid-year, Solana acknowledged that L2 was the correct path. Several reasons prompted this change: Solana's leadership noticed that some of its flagship applications began building custom L2 application chains on Solana—this is due to the common reasons customers prefer L2 (i.e., control and customization, while being part of the whole without having to run consensus themselves). Earlier this year, a well-known member of the Solana community posted a passionate message calling for Solana to adopt L2—this caused an uproar in the Solana community because they disagreed with this view before their leadership acknowledged the inevitability of L2. Additionally, a major Solana development team shifted to expanding and building Ethereum-based SVM L2 (transitioning from Solana L1 applications to Ethereum L2). As a result, Solana's leadership began to lean towards L2.

(It is worth noting that Solana has not acknowledged that Ethereum's view on L2 has always been correct, but claims that its L2 is not L2, but rather "network expansion," which is a huge marketing rhetoric. This is similar to the "True tps" concept recently proposed by Solana; they had to invent this concept because for years, they have continuously exaggerated Solana's tps (transactions per second) on many information sites, including counting 80% (!!) of consensus overhead. Many sites still claim Solana's tps is 3000, but it is actually around 750 tps. They invented "True tps" to counter the long-reported "False tps." My point is that serious on-chain investors should carefully examine Solana's claims during due diligence—many claims do not hold up under scrutiny.)

Fast forward to this month, and now Solana's leadership is starting to talk about how they can simply pivot to Ethereum's backbone strategy (but they cannot achieve it for the following reasons).

So, why is Solana now beginning to lean towards Ethereum's core blockchain strategy? Why now?

This is because everyone is finally starting to realize that the world needs many new chains (thousands of them), and L2 is generally much more cost-effective than alternative L1s (which is also why Coinbase, Kraken, Sony, and EVE Online choose L2), making being the core blockchain for L2 a top strategy.

Can Solana pivot to become a core blockchain? No, Solana cannot achieve this strategy (for the following reasons).

In fact, Solana is in serious trouble in terms of technical and economic strategy. What specific troubles does Solana face?

• Solana will not be fast enough or cheap enough to meet even a small portion of the upcoming global demand.
• Solana's level of decentralization is insufficient to attract true "whale" capital.
• Solana cannot become a competitive global backbone chain for L2.
• Solana binds consensus and execution together, which is more costly and slower than just doing execution. This is why the most scalable L2 chains only need to execute without handling consensus, allowing them to benefit from the overall trustless composability network effect, making them faster and cheaper than Solana. Refer to MegaETH.

This point needs to be emphasized again, as it is crucial: Solana will not only not become a backbone but will soon no longer be the fastest or cheapest chain.

Currently, for some (including many investors), Solana may seem like the best choice in all aspects—a better version of Ethereum. But the reality is far from this. Soon, on both technical and economic levels, Solana will be lacking in all respects.

Five Reasons Why Solana Can Never Become the Global Core Blockchain

1) Solana lacks true client diversity and will struggle to achieve it in the foreseeable future.

Client diversity means that the chain is run by multiple independent programs in parallel. This is very helpful in preventing attacks (multiple independent development teams and programming languages) and accidents (multiple codebases, as bugs are often confined to a single codebase).

User diversity is a necessary condition for a global core blockchain (currently, Solana is only supported by MEME for the network's survival).

a) To achieve client/user diversity, no single program can dominate the majority of validators' stakes, which requires at least three independent chain clients and a balanced distribution of stakes among them. Additionally, a detailed PDF protocol specification and an upstream research community are needed. The protocol specification defines the "definition" of the chain and the correctness and reliability of that definition. This ensures that all clients work towards the same rigorous goal.

b) Currently, Solana has only one production client (agave rust). Solana is working on developing a second client (firedancer), but due to the lack of a true protocol specification or research community, and the agave rust client being highly optimized and deeply reliant on underlying hardware, development progress is very difficult and delayed, which also increases the difficulty of extracting protocol specifications from low-level designs and re-implementing them in the new client.

c) Firedancer is still far from being able to run with 50% of the stakes in production with an independent codebase and may take years.

d) Even if Solana puts Firedancer into production in the future, it still will not achieve client diversity. To do this, they need at least a third production client (so that no single client holds more than 50% of the stakes) and achieve a balanced distribution of stakes among them, and all three clients must be 100% original codebases, with no code overlap, development team overlap, or code dependency/library overlap, and must use different programming languages.

Ethereum already has four production chain clients that meet these standards and has had them for several years.

2) Solana can never become a global backbone for the second reason that its chain requires very high bandwidth (recommended upload speed of 10Gbps), which significantly increases the risk of real-world centralization.

The core purpose of a global core blockchain is to minimize various forms of risk as much as possible, so placing the burden of extremely high bandwidth requirements on it is not feasible.

High bandwidth requirements are difficult to circumvent; although one can buy a high-powered computer and take it anywhere, achieving 10Gbps upload speeds is nearly impossible in many areas (especially outside corporate data centers or via VPN connections).

A global backbone must be able to operate anywhere. The ability to run the backbone network anywhere at any time (even the possibility of completely bypassing data centers in the future) is a key part of reducing risk.

Today, Solana recommends an upload speed of 10Gbps, and this will only increase in the future. Therefore, the bandwidth issue for Solana will only become more severe over time.

3) Solana faces a high risk of future outages: Solana has experienced multiple stalls in the past and lacks Ethereum's protocol-level fallback mechanism, which allows it to continue generating blocks even if it cannot "finalize."

When a global core blockchain serves 200 countries and $100 trillion in assets, maintaining stable operation is especially important, including never going offline.

4) Solana lacks economic decentralization: its initial token issuance (TGE/ICO, initial token issuance and initial public fundraising) had only about 2% publicly sold, with about 98% allocated to insiders.

Ethereum, on the other hand, achieved widespread distribution through a high inflation mechanism of PoW over seven years after an initial 80% public sale, as miners had to sell almost all ETH to cover mining costs.

In terms of economics and operations, Solana's concentration is high, increasing systemic risk and reducing its suitability as a global core blockchain.

5) L2's zk proof aggregation allows L1 global backbones to scale without sacrificing decentralization under any circumstances.

While Eth L1 (Layer 1 network) does not focus on execution scaling, in the future, L2/L3 (Layer 2 and Layer 3 networks), and even thousands of chains will be able to settle on Ethereum through zk aggregation.

Solana focuses on L1 execution scaling, but for a global core blockchain, this is a burden for the demands of decentralization and public trust neutrality.

Conclusion

Therefore, Solana can never become the core blockchain of the new global financial system.

In my view, Solana will not even become "a" core blockchain, as its market share will decline year by year, and compared to Ethereum (L1+L2), Solana will be at a disadvantage in key metrics such as non-native application funding or major enterprise integration. The reason is that the entire world finds it more advantageous to choose Ethereum L2 or L1 over using Solana or other chains. Don’t just take my word for it; look at the choices of many existing and soon-to-join enterprises and governments like Coinbase, Kraken, Sony, Visa, and the city of Buenos Aires.

Any enterprise or government seriously considering going on-chain will recognize these key factors, which will be crucial for future investments or constructions by enterprises and governments around the world.

Ethereum will become the core blockchain of the new global financial system. No other chain can compare to it, including Solana. L2 is encroaching on alternative L1 market share and driving ETH to become a circulating currency, which will bring tremendous value accumulation to ETH.