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On the evening of March 13th, around 10 p.m. (UTC+8), the Ethereum mainnet witnessed a significant upgrade: the Cancun upgrade. Among its implementations was the activation of a crucial protocol, EIP-4844 proto-danksharding (a prototype stage of data sharding).
As usual, the market interpreted the successful upgrade as positive news. On March 12th, Ethereum touched a local high of $4090. Two days after the upgrade, on March 15th, the price had retreated to $3845 at the opening, marking a drop of nearly 6% from its peak.
Meanwhile, Solana, representing the "enemy" that Ethereum's scalability should theoretically counter, began its rally from an opening of $143 on March 11th. By the opening of March 15th, it had surged to $167 without pause, and further accelerated. At the time of writing, it surged by 10% intraday, briefly surpassing $180, nearing its recent high of $259 in January 2021. Within just 5 days, it skyrocketed over 25% from $143 to $180.
Solana's rally delivered a resounding slap to Ethereum and its Layer 2 siblings.
The resounding slap echoed incessantly.
Immediately, astute Key Opinion Leaders (KOLs) stepped forward to make statements: the market is always correct. The Cancun upgrade degraded Ethereum into a block renter, transferring application taxes to its L2 siblings, but unfortunately, the siblings did not perform well. Consequently, Solana defeated Ethereum and its allies, causing them to retreat in disarray.
Market pricing is always effective and accurate, a principle known as the Efficient Market Hypothesis. Although market pricing errors often occur, creating investment opportunities, this theory is cherished by value investors.
Perhaps the key lies in whom the "leeks" (novice investors) believe.
If the leeks believe that the market is always correct, it provides an opportunity for the market makers to raise prices and create selling opportunities.
Ethereum's upgrade led to Solana's surge. There could be three reasons behind this:
1. Ethereum's upgrade has declared the failure of its scalability roadmap, demonstrating the rise of new public chains and the decline of Ethereum. The secondary market correctly identified this and reflected it in prices.
2. Ethereum's scalability roadmap is successful and pragmatic, and new public chains do not have years to bounce around. Ethereum will eventually dominate the smart chain market. The secondary market misjudged this trend, resulting in temporary mispricing.
3. Ethereum has not failed, but its success is still unrecognized, while challengers will fail. Market makers have a deeper, more thorough, and advanced understanding of this. Therefore, they want to take advantage of this window before the market realizes it, boost prices, sell at high levels, and hand over the project to the leeks. In this case, new public chains will experience a miraculous rise in the secondary market, attracting leeks to buy at high levels.
So, which situation does the current scenario belong to? Each person has their own free judgment.
In the rough cryptocurrency market, advocating one's own righteousness in a straightforward manner is often effective. This is "boosting prices" —— like raising a big flag during ancient military expeditions.
Under the big flag, the people gathered. With the boosting of prices, they flocked.
Until Ethereum holders change their minds, switch allegiance, and sell Ethereum to buy new public chains, boosting will continue, until your beliefs change, you sell, and the project rises firmly.
In this situation, who still cares about "down chains"?
Yes, this game was set up long ago. By the end of 2023, "the crypto research firm Messari, which 'to some extent represents mainstream views of Western crypto investment institutions,' expressed a strong opinion in its year-end report, favoring Solana and bearish on Ethereum." (source as above)
In terms of decentralization, isn't EOS as decentralized as Solana? In terms of performance, isn't EOS more performant than Solana? Saying that Solana can overthrow Ethereum, EOS strongly disagrees. But EOS lost. Whether it's because of bad timing or self-inflicted harm, Block.One, holding a large amount of BTC raised from leeks, comfortably lies flat, waiting to eat and drink, without caring about the success or failure of EOS itself.
Just take a simple look at the current actual data:
Solana's network handles approximately 3000 TPS. The gas fee for one on-chain transaction is about 0.000005 SOL, which is approximately $0.0009 at the current price of $179, less than $0.001.
Ethereum's L1 network handles about 15 TPS. The gas fee is about 55 Gwei, approximately $4 at the current price of $3765.
For Ethereum's L2 network, taking Optimism as an example, it handles less than 10 TPS. The gas fee is about 0.011 Gwei, equivalent to $0.0009, less than $0.001.
These TPS figures represent actual transaction rates rather than the network's maximum design capacity. If the chain is not active, then no matter how much transaction volume the chain can handle, its actual TPS will be relatively low.
Ethereum's route to scaling from ETH2.0's shard calculation to data sharding has become a new route of data sharding + L2. The Cancun upgrade is just the prelude to data sharding. The true first-layer sharding will require subsequent upgrades to achieve the final goal of exceeding 100,000 TPS as outlined in the "The Surge" roadmap. |
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Post time 31-3-2024 21:34:48