Ethereum dominates in fees, TVL and staking rewards
The impressive growth of the Solana network is likely Ethereum’s biggest Achilles' heel, evident in its remarkable 83% onchain volume growth, driven by a total value locked (TVL) of $8.3 billion. Despite having significantly lower deposits compared to Ethereum’s $59.4 billion, Solana leads in decentralized exchange (DEX) volumes.
Ethereum remains the dominant force in fees, crucial for network security, having generated $163.7 million in fees over 30 days, according to DefiLlama. Solana, on the other hand, earned $133.4 million in fees during the same period, with Tron in third place at $51 million. Interestingly, Solana's three leading decentralized applications (DApps)—Raydium, Jito, and Photon—generated an impressive $338.5 million in fees within 30 days.
Ethereum staking reward vs. ETH inflation rate. Source: StakingRewards
In contrast, Ethereum staking offers a 3.3% annualized reward rate, while the equivalent ETH inflation rate stands at 0.7% or lower. Although this difference may seem minor at first, Ethereum's 2.6% adjusted return is a far more attractive proposition compared to Solana’s 1%. In practical terms, this positions Ethereum to capture institutional deposits, a key factor in maintaining its leadership in total value locked (TVL).
This innovative scaling approach could enable multiple execution shards, increasing transactions per second. Joe Lubin views it as a way to aggregate computation, while some speculate it could eventually eliminate rollups. However, achieving these objectives may take years.
From an onchain perspective and in terms of competitive advantage, Ether has the potential to outperform the broader altcoin market capitalization, but its success will depend on the delivery of its roadmap.
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