Ethereum and Solana criticisms examined

Transcript

now let's dive into the potential or proposed problems of both ethereum and salana and I will do a little bit of fud control on these to help people really wrap their heads around what's truly Happening Here the proposed problems I think of ethereum and salana are narratives that I think are being built by the opposing ecosystem and so again Maxis will will double down on these whereas I'm going to try to peel back the layers and help you understand what's truly going on here so the first is that ethereum fees are too expensive and if you use the layer one the ethereum L1 then of course yes are 20 30 $40 $50 to transact makes no sense on blockchain and that's what they currently are in ethereum and they will probably always be but the reason why this fud or this this problem doesn't make any sense is ethereum L1 is not

meant for humans to transact and so we aren't meant to do things on their apps are not meant to be on there the reason that humans are on there and apps are on there now is because l2s just came along you know less than two years ago and so we are moving everything we are bridging everything over to the l2s just some people haven't done that yet and then also institutions whales people with millions and millions of dollars that don't need cheap fees that just want decentralization to the max they want Max security for their assets they'll use ethereum L1 and they'll pay $20 fees and they don't care but all of us who are here airdrop farming and you know trying to make our first bit of money you know it doesn't make sense for us but that's not what the ethereum L1 is

for and so the fees are going are expensive they're going to stay expensive and that's the purpose of ethereum because that's what helps it have its Economic Security well we meant to do is use the l2s that's the whole road map an idea of ethereum and I think people just haven't wrapped their heads around that so fees are meant to be expensive on ethereum it's the l2s that you use where they aren't expensive and so that brings me to my next problem on ethereum which is people are saying that layer 2os fragment liquidity they break composability and bridging is a big problem and So currently yeah it's sort of an issue there are 50 to 100 l2s right now most people have assets on one or the other you got to bridge from one to the other the bridging is not great I'm first to say this I say it all the

time but DC investor who's been around this space for a long time his tweet here that I have up on the screen just says I think many of you have incorrectly faded ethereum l2s and what they will eventually mean for ethereum and for eth because you believe how you use this Tech today it's how most people use it tomorrow but in my opinion it mostly won't be people transacting on l1s at all we got to understand that one bridging will get abstracted away it won't ever be an issue it just is right now it's almost fixed but we're still working on it but eventually you'll just move from L2 to L2 and you won't even have to think about it it just will be abstracted away you actually won't even know you're moving from L2 to L2 you'll just go to buy something in one app

because you'll use the app itself and your liquidity underneath will just move underneath for you you won't have to do anything you have to think about that you won't have a wallet where you're looking at what's on optimism what's at arbitrum it'll just all happen for you it'll just completely be abstracted away and we're even close to that now and then that means liquidity won't be an issue and it won't be fragmented and same with composability composability is not even a problem right now for example we have an onchain gift shop where you can earn certain things depending on things that you mint and right now whether you minum on base polygon arbitrum whatever it all works in the same ux you don't have to move things around it just it can read what's on what chain so it's quite simple actually and I don't think it's as

broken as what people think I'll talk more about l2s in just a second but the way that we use blockchain now is not how we're going to use it in the future we won't actually be interacting with the chain like we do today most people we won't be airdrop farming and doing all these things and trying to move liquidity from one app to another and it just all that stuff will just happen for us and so I don't think that how we use today is a good indicator of what will happen one two three years from now so that's a really important one next it's too confusing with so many l2s so a lot of Salon people will say there's too many l2s and so it's confusing for developers and so they'll just go to salon instead because there's just one salana this is a complete false

narrative that salana people will make up because the fact that there are many l2s makes it even harder for people to then decide to go to salana because people aren't looking and going okay do I build on an L2 or do I build on salana they're going do I build on salana do I build on arbitrum do I build on optimism do I build on polygon which they're all just execution lers there's no like I'm G to either go in the L2 ecosystem or I'm going to go on salana and so if I go in the L2 ecosystem I have to then decide between 50 of them it's just which chain do I want to build on and that is going to be 50 to you know however many options there are to build on right and so if 99% of those options are l2s on top of ethereum that's very

bullish ethereum because no matter what ethereum wins doesn't mean every L2 wins but it's not like it's like either l2s or salana it's one of the many execution layers and this is why I say I don't think ethereum is competing with salana so much anymore it's salana competing with l2s and so I I just think that's a very false narrative again I don't think people are deciding between which L2 because they only want an L2 it's just which execution layer is best and that could be immutable it could be optimism could be salana whatever so I think it's a false narrative and I think the mor Al to it actually becomes even probably more difficult for salana because there's just too many options outside of Sal the other one is that Soul's Tech is better Sal's Tech is better and so why would anyone build an ethereum now if

it's better if it's faster it's cheaper why would anyone build an ethereum and what people are understanding is that fast and cheap isn't the only thing that matters there are other features that matter when you're building on a platform that could be decentralization that could be functionalities that could be different features that could be stuff like kyc could be many different things right and so we looked just this past week and flip cart which is the 350 million users they're basically the Amazon of India in terms of like an e-commerce platform they are launching a onchain and what are they doing they're launching L2 now look they know Salon is faster Salon is cheaper but they want to build their own ecosystem on chain not an app but an ecosystem which means they probably want others to build on top and

they want to generate Revenue if others build on top of their ecosystem they want to control the ux they want to control more things and so building on L2 for them makes sense if they build on salana they don't get to control any that salana controls that right I think we're going to see more platform like businesses use l2s rather than building on a chain an L1 because they have more functionality so your Amazon your apples Etc they're going to have an L2 or their own chain but probably an L2 rather than building on an existing L1 okay even if you want just like a reason to show hey this is actually true and it's working coinbase just today launched another L2 now this is one for institutions so it needs different functionality than what

Bas offers it's probably going to have some kyc stuff and whatever else but regardless it didn't launch Us in Salon just because it's fast and cheap it launches another L2 because they know they can make revenues from it and they have more control over it so I think a lot of people are just missing the idea of what l2s really are which again l2s are becoming very easy very cheap to create and to launch and it gives you functionality in your own chain without having to worry about figuring out security and a token and all that stuff and so it's a game Cher and I think l2s there's going to be many many many of them again the bridging will get abstracted away but more than that most people just won't even move from one chain to another they'll just use an app not a chain they'll think that they're

using an app just like we use Spotify today they might just go and use sound which is on optimism and just like they might purchase some stuff with their credit card or with crypto in there and it just stays there they don't need to worry about bridging and then they'll go elsewhere and they'll again purchase with their credit card over on another one and that's how the internet currently works today too so there's the ability to bridge but I just don't think many people are going to use it or need to use it so we got to stop thinking about how we use it today it's going to be much more easier to take money from anywhere and put it into any app in the future so those are the fundamental problem proposed problems on ethereum that I just think most of those are just

completely untrue let's flip over to salon and look at the proposed problems over there if you have listened to an ethereum maxi maybe even Bitcoin Maxi they say that salon's chain shuts down frequently this is just completely false it was true last year and more even year before that it did shut down a couple times they've been working to figure that out the tech has improved again it launched in 2020 and so of course it's going to have some issues in terms of the technology in its first couple years ethereum and Bitcoin both also had issues and so to say that it's a shitty chain because it had issues just makes no sense but you can look on this site here and salana has not had any downtime since I think it's February maybe yeah February of of 2023 so we're almost a

year with absolutely no downtime no issues at all with the chain which kind impressive and I think we'll continue to see that stay with 100% of time moving forward they have fixed those problems so I don't think this is still an issue like most people would say salana is not decentralized that's another one that people will say and look the validator numbers of salana are lower and the requirements to run a validator are higher in terms of costs but the thing that Salon is betting on that they think people are missing is mors law which is basically that Hardware becomes more performant so faster and I think it's something like every two years it doubles which also means it then becomes cheaper to have the previous amount of gpus or CPUs or whatever speeds that you every two years and so I think over time

the hardware requirements for Solana will go down in terms of price and it'll also become more efficient at the same time and so I think decentralization is not even now is not really an issue for slite I think it's going to get it has a path to get even better and better over time again I just think this is people who are too far gone on the Bitcoin Maxi side where everything has to be 100% you know secure and decentralized I just I don't think that's necessary for everything and so I think salana is not that's not an issue for salana just something that people continue to sit on because you know in 2021 it was not it was very centralized it's been fixed and is continuing to be fixed on an ongoing basis okay the last one and this one still is is definitely an issue for

salana which is that the tokenomics of salana are not sustainable currently this one is true but I I do see sort of a path for salana to fix this which is Sal's inflation rate right now is about 7% and then it doesn't make a lot of revenue from its fees I can pull this up here currently salana is bringing in about $163,000 per day in its fee Revenue the problem is is that because it's inflation is 7% and that's what it's paying out its validators to run the network its expenses are over $10 million a day right so if there's a massive hole here we look at earnings I mean they are what do we at here you

know $1 million to let's see what are we at 11 million like we're on a weekly basis they're just they're losing a lot of money in terms of its tokenomics okay it's in the hole every single day by millions of dollars which is obviously a a really big problem because it's it's essentially inflating its currency even worse than something like the US dollar and so is there a future for that the thing that I would say is one its inflation schedule is programmed to go down over time and by 2030 it should reach about 1% so that really significantly reduces the expenses now it doesn't mean it's going to happen exactly by 2030 but that's their proposed decrease in its inflation by the way ethereum Bitcoin all had the

same thing they all had higher inflation at the beginning and that will go down over time this is normal for any company like any startup they get funding right they had subsidize the costs of whatever it is you user acquisition Etc in the early stages until it can generate enough revenue and so salana basically needs to 25 to 50x its revenues so the question is can it get 25 to 50x more transactions and I think it can I don't see why not like it's still very very early days in salana and it's very very early days in web 3 and so I can see this continuing to go up and up and up now remember these numbers are oh that doesn't work but these numbers are going up because the price has slen up not necessarily because there's more transactions but over time there will be and so I think

that they will find a balance at some point but we could be years away from that so is that a problem sure it's a problem for now but again we don't yet know how much sustainable to economics is even going to matter I these sort of P it's something just very different than we're used to by the way if we compare that to ethereum ethereum is very profitable in its toonomic structure in upwards of millions of dollars a day that is profitable so it's a very big difference thank you for listening to web through Academy your one trusted source to capitalize on the next big phase of the internet if you enjoyed this episode please share it and subscribe or follow so that you don't miss the next one while you're at it there's a link in the description for our free newsletter where we provide

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