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Digital asset manager Grayscale has published a report on smart contract platforms in which it likens the Ethereum (ETH) blockchain to the best and worst parts of New York City.<\/p>\n
The report examines<\/a> the granddaddy smart contract network Ethereum in comparison to newer competing blockchains<\/a> such as Solana<\/a> (SOL<\/a>), Avalanche (AVAX<\/a>), Polkadot (DOT<\/a>), Cardano (ADA<\/a>) and Stellar (XLM<\/a>). The report comes in the wake of the firm launching a crypto fund<\/a> dedicated to smart contract platforms, excluding Ethereum. <\/p>\n In a section titled \u201cDigital cities,\u201d Grayscale analyzed Ethereum, Avalanche and Solana. The firm compared Ethereum to the Big Apple, noting that they share similarities with issues that arise from their stature: <\/p>\n \u201cEthereum is like New York City: It is vast, expensive and congested in certain areas. However, it also features the richest application ecosystem, with over 500 apps that command a total value of over $100 billion\u2014more than 10x larger than any other competing network.\u201d<\/p><\/blockquote>\n \u201cUsers and developers take comfort that Ethereum will likely continue to be the center of gravity for application innovation and liquidity due to the size of its community and the amount of capital locked into the network\u2019s smart contracts. An L2 solution like Polygon is comparable to a skyscraper in NYC: It scales by building upwards,\u201d the report added. <\/p>\n The firm went on to suggest that users moving to competing blockchains is like moving to a cheaper city due to the high gas fees and network congestion on Ethereum caused by overwhelming demand for decentralized finance (DeFi) services and nonfungbile tokens (NFTs) over the past two years. <\/p>\n \u201cAs Ethereum fees began to eclipse $10 per transaction, smart contract platforms like Stellar, Algorand, Solana and Avalanche experienced strong growth in daily on-chain transaction counts,\u201d the report read. <\/p>\n Grayscale described Solana as like Los Angeles, noting that it is a \u201cstructurally distinct network that is speedier and focuses on different use cases\u201d such as on-chain order books such as Mango Markets, which requires fast transaction speeds and low fees to operate. <\/p>\n \u201cSolana\u2019s architecture relies on a different consensus mechanism that prioritizes speed and lower fees though at the cost of more centralization \u2014 rather than scaling through L2 chains, Solana runs transactions through a speedy L1 chain. Running roughly 2300 transactions per second as of March 15, 2022,\u201d the report reads.<\/p>\n Avalanche was compared to Chicago in that its economy is similar to NYC, but has a smaller network, \u201ctransactions are cheaper and less congested, and development is more centralized.\u201d<\/p>\n \u201cGame-specific subnets like Crabada, and partnerships with firms like Deloitte should offer more differentiation compared to apps on other chains, helping Avalanche craft a distinct identity moving forward,\u201d Grayscale wrote.<\/p>\n