Ethereum’s place near the top of the crypto market is unquestioned from the perspective of market cap. But beneath the surface – at the product, developer and decision-making levels – the original smart contracts platform continues to take a beating from Solana, one of its closest competitors.
The threat may not yet be existential. Ethereum and its many closely-linked networks are still the most important, influential, and largest platforms for decentralized finance. That lead is beginning to erode, however, with many newcomers to crypto choosing Solana’s speed and low fees.
It’s enough for some of Ethereum’s most vocal backers to muse if the network needs to shift to a war footing.
“Ethereum has been at peacetime its entire life,” ETH maximalist David Hoffman said on a recent episode of his podcast, Bankless. “Today, more people are thinking this period of Ethereum’s life has come to an end.”
The dynamic was further punctuated Monday with news that longtime Ethereum ecosystem developer Max Resnick was moving into Solana’s orbit, abandoning his job at the developer studio Consensys.
Last week was my last week at Consensys. Today is my first day at @anza_xyz.
I’m taking my talents to Solana.
In my first 100 days, I plan on writing a spec for as much of the Solana protocol as I can get to, prioritizing fee markets and consensus implementations where I…
— Max Resnick (@MaxResnick1) December 9, 2024
“There’s just so much more possibility and potential energy in Solana,” Resnick said in an interview with CoinDesk. He framed the decision as rooted in his own career path, but noted “frustration” with Ethereum’s inability to adapt contributed to the move.
He criticized a culture of ossification that gets in the way of progress. Ethereum lacks a streamlined process for making quick changes. Some see that as a point of strength for a decentralized network, while others, like Resnick, see it as a hindrance for long-term success.
Speed of an iceberg
Ethereum is rather notorious for being a somewhat unwieldy technical beast of a network. Its developer community looks toward co-founder Vitalik Buterin’s annual “roadmaps” as a benchmark in tracking Ethereum’s sluggish march of progress. A number of important changes may still be years away.
While Ethereum’s decision-making may not be as purposely disjointed and ineffective as Bitcoin’s, the network still contends with an unhealthy degree of internal politics, said Resnick. Big, important discussions over improving the network “are happening in Vitalik’s DMs,” he said.
“If you do need to make rapid changes to keep up with competition, which I think Ethereum has to for the first time now, then you are really going to need to change that process up somehow.”
It was enough to prompt Resnick to search for a new home, and to land at Solana. He took a job at Anza, a spinoff of Solana Labs that is charged with building its core client. He said he’s a fan of Solana’s ability to move fast in the face of competition.
Off the iceberg
One startling moment in the brewing fight between Solana and Ethereum came last week from Pudgy Penguins, one of the best-known NFT collections on Ethereum. The team behind Pudgy Penguins is launching a token, called PENGU, but doing so on the Solana network, not on the NFTs’ home of Ethereum.
The shock announcement spurred plenty of hand wringing on crypto twitter.
1/ The Pudgy Penguins $PENGU launch on Solana isn’t about “ETH’s UX problem”
It’s about a deeper rot in ETH’s culture.
And as someone building an L2, let me tell you why this matters…🧵 pic.twitter.com/fQIFJGLWn5
— f(gautham)💤 (@gauthamzzz) December 7, 2024
At the least, commentators took the decision as evidence of Solana’s superiority as a retail-friendly chain when compared to Ethereum. Many other ETH-native projects have sidestepped main-chain woes without leaving Ethereum entirely. They build on layer-2 networks that are built on top of Ethereum. Meanwhile, PENGU is completely off the iceberg.
Ethereum researcher Justin Drake was unfazed by the competition in an interview with CoinDesk published last week. According to him, Solana does not put enough priority on “health” to win in the long run.
Resnick sees it differently. And he claims he’s not the only one.
“There are many people in ETH – many of whom have made much bigger contributions than I have – who are frustrated about the state of Ethereum and are asking for change, and who are saying, ‘hey, if these changes don’t happen I don’t know how much longer I will work here,” he said.
