Ethereum and Solana are kings of smart contracts right now. The founder of Solana, Anatoly, and Justin Drake from the Ethereum Foundation held a debate. It showed the difference between how Solana and Ethereum view blockchains. I'll give you a summary of the debate.

Ethereum views L1 wars as the winner takes the most. Whereas for Solana, blockchains are more like back-end systems that are likely to change every 4-5 years. This informs how they choose to build their chains as well:

1. Ethereum optimizes for maximum decentralization and security. This is due to their long-term view that focuses more on monetary premiums, infrastructure, and so on.

2. Solana, in contrast, optimizes for a better user experience by creating a fast and cheap monolithic L1. They focus more on the short-term and seek to build products that attract a lot of users.

It's these optimizations that serve as the root of their advantages and disadvantages:

- Solana VM was considered more suitable for engineers to build dApps. But Ethereum VM has the advantage of being early.

- Gas fee, transaction speed, and throughput are better on Solana. However, since it is difficult for normal users to run their nodes, they are sacrificing decentralization.

- Ethereum is scaling via L2s, but they are fragmented and create a poor user experience. This can be solved by using a shared sequencer and pre-confirmations. But this is a long-term project that'll take years.

- In contrast to Ethereum, Anatoly views "monetary premium", “sell-pressure as network cost”, and “economic security” as misleading concepts. The tokenomics difference between $SOL and $ETH is partly because of this.

If you want to hear all the details, listen to the debate here.

The Numbers

Beyond talking about the theoretical differences between these 2, let's see how they are doing in terms of key metrics

The above chart compares TVL for Ethereum and Solana. Despite the chatter on CT, Ethereum still secures the majority of value in the crypto space. Compared to ETH's $116B in TVL, Solana “only” has $8.9B.

So, a good proxy for checking actual economic activity on both chains is DEX trading volumes. Using that metric, Ethereum actually takes the lead. In May, Ethereum had $65.7B whereas Solana had $35.3B.

There's one caveat about the DEX trading volume numbers. It doesn't include Pump.fun activity on Solana. Last month, the majority of memecoin degeneracy happened there. Also, Ethereum collects more fees and revenue than Solana. This is kind of expected since Solana is known for its low fees.

Sentiments

Metrics from Google Trends are a good proxy for understanding retail sentiment. Ethereum still has the lead across web and YouTube searches.

In conclusion, both Solana and Ethereum are doing well. Ethereum has the incumbent advantage. It has a huge lead in TVL. But Solana is attracting most of the new activity. Solana has a gigantic lead in the number of transactions. It’ll perform well in this cycle. In the very long term, Ethereum seems to be better positioned. But they need to ship a lot of tech like pre-confirmations and shared sequencers. Before that happens, Solana has the opportunity to capture market share.

What Should You Do?

First, don't be a tribalist. No, I'm not talking about your ethnic background but the blockchain you "support". You are in this space to make money, not to join a bandwagon of mindless supporters who are constantly on X defending the blockchain they support and simultaneously attacking other blockchains.

Learn to take advantage of both. Ethereum and Solana have very great features in their ecosystem unique to their chain that makes them very attractive for traders and investors