Here is Why “Solana Can Never be the Backbone of Global Financial System”
Solana prominent applications building custom L2 appchains on Solana, driven by the advantages of control and customization offered by L2s.
Ethereum stands as the backbone of the nascent global financial system, encompassing Layer 2s (L2s) and Layer 1 (L1) applications. “No other blockchain like Solana will approach its prominence,“ says an Ethereum core supporter.
Moreover, while suggestions have been made that Solana could pivot to fulfill a similar role, Solana is fundamentally unsuitable for this position.
Solana’s “monolithic” era, as they termed it, quickly became a liability as it became evident that a single chain couldn’t cater to the global market. Solana then transitioned its marketing to emphasize “integration.”
Mid-year, Solana acknowledged the burgeoning importance of L2s. This recognition stemmed from several factors. Solana leaders noticed prominent applications building custom L2 appchains on Solana, driven by the advantages of control and customization offered by L2s.
Moreover, a prominent member of the Solana community penned a thread highlighting the need for Solana to embrace L2s, which ignited fierce debate before leadership finally acknowledged their inevitability.
Additionally, a significant Solana development team pivoted towards building an SVM L2 on Ethereum, demonstrating a shift in the ecosystem.
However, Solana claimed their L2s are not L2s, but rather “Network Extensions.” This rebranding represents a significant marketing spin, akin to their recent invention of “True tps.”
Solana Historical Development Pattern
Solana’s historical practice of misrepresenting its throughput (tps) by including consensus overhead has led to many platforms still quoting a figure of 3k tps when the actual figure is closer to 750 tps.
The introduction of “True tps” was a desperate attempt to address this persistent misrepresentation. Serious on-chain investors must scrutinize Solana’s claims, as many do not hold up under scrutiny.
However, despite these recent pronouncements, Solana cannot simply pivot to become a backbone. This strategy is inherently inaccessible to Solana, due to fundamental limitations, says
Ryan Berckmans
Solana faces significant challenges in terms of its technical and economic strategy. It will not possess the speed or cost-efficiency required to serve even a fraction of the world’s burgeoning on-chain demand. Moreover, Solana lacks the decentralization necessary to attract substantial capital.
The underlying issue is that the blockchain bundles consensus and execution, resulting in slower and more expensive operations compared to systems focusing solely on execution.
The most scalable L2s, operating solely on execution and benefiting from the broader trustless composability network effect across all L2s, will soon surpass Solana in terms of speed and cost.
Despite its struggles, Ethereum has adopted a long-term chess strategy, focusing on capturing the majority of on-chain growth through its L1 backbone and L2 marketplace. This strategy aligns with the natural evolution of the global onchain landscape, fostering scalability and accessibility.
