Economist and crypto commentator Tasha Che recently stated on a Twitter thread that things are changing rapidly for Layer 1 chains as space becomes competitive. She said,
“The truth is what Ethereum wants to be in the future – sharding, security layer for L2s, etc. – newer chains are already delivering similar things in a more elegant way …”
She went on to explain, “It’s hard to imagine a scenario in which Ethereum would surpass competing solutions.” This is something that the latest report from Arcane Research also outlines. The latest report found that ETH outperformed BTC in 2021, but other Layer 1 networks like Solana outperformed ETH.
With that, Arcane Research predicts that other Layer-1s will be introduced faster in 2022 and that they will continue to outperform Ethereum. The report also stated
“… other Layer 1 networks such as Solana, Avalanche, Terra Luna, Fantom and Harmony have clearly outperformed ETH. We expect this trend to continue into the coming year as these other smart contract platforms continue to steal market share from Ethereum in terms of users and the amount of money stored on the network. “
Che also explained why Solana is a critical project.
“Solana has the highest staking rate among the big L1s for good reason. The community is strong and according to the FUD of modular audience only gives the supporters breathing space to collect more. “
She also stated, “Solana’s lead would not go away overnight, but more successful apps are needed to maintain that lead.”
In all of this, BSC is something of a star. Arcane Research has analyzed that Binance Smart Chain was the first alternative ecosystem to take market share from Ethereum. And after that, projects like “Solana, Avalanche and Terra have seen a growing penetration with other Layer 1 protocols lurking a bit behind them.”
At the time of writing, we can also tell that Ethereum’s TVL stake as a DeFi chain has dropped to around 62% from where it was close to 70% a few months ago. The Terra chain is not close to second, but is now calling for an 18% TVL on Defillama with 14 logs. This is when there are 375 protocols on Ethereum.
Regarding Terra, Che commented:
“So my opinion of Terra is similar to that of South Korea – it has a place in the portfolio, but not everything that you can get involved with.”
On the log front, BSC is keeping 246 logs and the report also noted that the Binance smart chain ecosystem “saw massive growth in 2021 and Ethereum took some market share”.
