Ethereum’s Grip on Number 2 Spot Slips: Can It Withstand Solana’s Rapid Ascent

Ethereum has held the mantle of decentralised finance’s undisputed ruler since it burst onto the scene in 2017. The advent of smart contracts was revolutionary for the crypto industry, bringing a new era of utility and possibility to blockchain technology. At the time, Ethereum was the only player in its field and naturally soaked up the vast majority of market share. Today, while ETH is still Bitcoin’s clear second-in-command, there are plenty of up-and-comers gunning for that title.

‘Ethereum Killer’ Buzzword Back on the Menu

Every second DeFi blockchain with smart contracts was labelled an Ethereum killer through the 2021 bull run. The key rationale is that Ether’s network was struggling with the impressive volume it had attracted, and that for Web3 to take the next step, its capacity would need to be increased. And so came the lightning-fast, cheaper and more efficient alternatives.

Leading the pack is Solana (SOL), a key project that has, like a phoenix, emerged from the ashes of FTX’s collapse better than ever. The DeFi ecosystem has enjoyed an incredible 2023, with on-chain metrics, trading volume and institutional partnerships backing a monster 650% price increase. Solana’s market cap is now only 1/7th of Ethereum’s (it feels funny to use ‘only’ in this context) and even recently overtook Ether as the most active DeFi chain – albeit just for a day.

Ethereum’s hotly contested crown has other participants too, according to a recent Forbes article:

• Binance Smart Chain (BNB)
• Polygon (MATIC)
• Avalanche (AVAX)
• And Ethereum L2s like Optimism and Arbitrum

Amid the Chaos, Ethereum Still Reigns Supreme

You’d be forgiven for thinking that Ethereum has fallen off the map given all the ‘ETH-killer’ buzz. But in reality, rumours of the blockchain’s demise have been greatly exaggerated. Even with literally hundreds of new projects created with one goal in mind – to dethrone Ethereum, the project still maintains by far the biggest DeFi community, ecosystem and market cap of any altcoin. It has survived assassination attempt after assassination attempt, and is firmly entrenched as a stalwart of the crypto industry.

However, it may be a fair analysis to suggest that Ethereum’s growth potential could be capped compared to some of its competitors. A +60% market share amid a growing appetite for DeFi appears rather difficult and may ultimately subdue potential token gains moving into the next phase of blockchain tech. However, there’s no reason that in an interoperable Web3 Ethereum, Solana and many more innovative chains can’t exist in harmony for decades to come.