From the outside, one might think public blockchains are a two-horse race, pitting DeFi pioneer Ethereum against its closest and fastest challenger, Solana. In fact, DeFi activity and liquidity (total locked value) may somewhat reinforce the above picture.
Check this out – Out of the total DeFi TVL of $95.3 billion, Ethereum dominates with $56 billion, while Solana comes in second at $6.8 billion – About 10% of Ethereum’s size.
However, Evgeny Gaevoy, CEO of crypto market maker Wintermute, believes neither of the two leading chains has a sticky moat.
ETH vs SOL – No clear winner just yet
For Ethereum’s massive TVL, Gaevoy claimed that most of the capital on the chain is “stuck money” and “corporate experiments” on blockchain rails.
People quite overestimate those corporate pilots to put some cash markets and bonds on the block. It’s a tiny TradFi economic activity.
On the contrary, for Solana, the memecoin mania has revealed that its technology works and it can handle massive transaction volumes with faster transfers.
According to the exec though, Solana is still stuck with memecoins. Additionally, there are no major new dApps or exchanges to catalyze it.
He concluded,
I don’t feel anyone has won yet. It’s feasible that a new blockchain could attract a new cohort of believers and take the world by storm. It’s possible because nobody has this moat yet.
In the stablecoin and tokenization boom, Ethereum and Solana are still ranked first and second, respectively.
Hyperliquid validates his theory
Gaevoy’s arguments are plausible too, especially after Hyperliquid’s success despite being operational for about three years.
The chain and DEX were purpose-built for high-frequency crypto trading and DeFi activity. However, now it has become the best place to trade oil and other commodities amid geopolitical tensions.
Interestingly, the massive trading activity across crypto and non-crypto assets has driven Hyperliquid to generate more fees and revenue.
The results? Hyperliquid now dominates 45% of the generated fee revenue market. TRON controls 20% of the revenue, while Solana ranks third with a 13% market share. Finally, Ethereum comes fifth at 7% after BNB Chain’s 10%.
And yet, the current perceived ‘moats’ for Ethereum and Solana, such as stablecoins and tokenized markets, are under threat from rival private corporate chains.
Stripe-backed stablecoin payment-focused Tempo chain went live recently. A similar chain, Circle’s Arc, debuted too. The full roll-out of Google Cloud Universal Ledger (GCUL) is expected this year, with all of them eyeing payments and tokenized capital markets.
All these new chains seek to scrap the volatile, unpredictable transfer fees charged by current public chains and minimize scams. So, it’s feasible they could eat into public chains’ market share and their perceived moat.
Final Summary
- Wintermute CEO has downplayed the perceived moats of Ethereum and Solana, warning that they could still be easily disrupted.
- Hyperliquid’s 45% market dominance in total blockchain revenue validated exec’s argument
Benjamin Njiri is a Crypto Analyst and Reporter at AMBCrypto, specializing in technical analysis and emerging market trends. With a background in Telecoms engineering and power systems, he applies data analysis to filter market noise and decode on-chain data. His work delivers clear, data-driven insights that help readers navigate crypto markets with confidence.
