Ethereum
Solana (SOL) Beats Ethereum for the First Time in History, But There’s a Catch — TradingView News
On May 12, Solana generated more total economic value (TEV) than Ethereum in a single day. This is the first time Solana has surpassed Ethereum in its history, but there is always a catch.
Break down the data
According to Blockworks Research, Solana generated $2,248,681 in TEV on May 12, surpassing Ethereum’s $1,977,416. TEV combines transaction fees and miner/extractor value (MEV). TEV is often used to analyze the utility and adoption of a blockchain network.
For the first time ever, on May 12, Solana generated more total economic value than Ethereum in a single day pic.twitter.com/nrCe7pMNjb— Dan Smith (@smyyguy) May 14, 2024
Chris Burniske, the former Ark Invest analyst, commented on the whole by stating that we should keep an eye on L1s which continue their annual expansion in the form of TEV. A higher TEV can indicate increased usage and demand, which can, in turn, provide more flexibility in grid economic policies.
There is a problem
However, this realization sparked debate between Solana and Ethereum users. Critics argue that comparing Solana’s TEV with Ethereum’s without considering layer 2 (L2) solutions is misleading. L2 solutions are built on Ethereum to improve scalability and reduce fees, effectively offloading some of the activity from the main Ethereum blockchain (L1), while remaining a crucial part of it. As one commenter pointed out: “Since some ETH activities have been moved to L2s, wouldn’t we include them? Come on Chris, it’s just disingenuous if you don’t take L2s into account.”
Despite the criticism, comparing TEVs across blockchains remains valuable. As Burniske explained, each L2 operates in its own block space environment, and TEV comparisons are generally performed on an L1-to-L1 basis. However, some may disagree with such an approach and view L2s as an inseparable part of larger ecosystems like Ethereum, which has struggled due to high fees in the past. For now, Ethereum’s fees sometimes even fall below those of Tron.