While one of the networks currently enjoys greater popularity, the other surpasses it in locked value.
The competition between the Solana and Ethereum networks has intensified in recent months, capturing the attention of cryptocurrency investors and enthusiasts worldwide. In this race, each network has its strengths.
According to a report by CoinGecko analyst Lim Yu Qian, the Solana ecosystem has seen a significant surge in popularity this year, surpassing Ethereum and other networks such as BNB Chain, Cosmos, and Avalanche.
With a 49% global interest in specific network narratives, Solana has garnered investor support thanks to its ongoing surge and standout performance, as depicted in the following graph.
The popularity of Solana has been significantly influenced by the strong performance of key ecosystem project tokens, such as Pyth, an oracle network designed to publish real-world financial data on-chain.
Another factor solidifying Solana's position as the most popular network is the presence of memecoins—digital assets based on memes—that thrive on the network. Solana hosts several such assets that have shown remarkable performances in recent weeks.
In fact, the high trading volume generated by memecoins has pushed network fees to historic highs. One notable example is Dogwifhat (WIF), which saw a price increase of over 300% in early March and even entered the top 100 cryptocurrencies.
Among Solana's memecoin roster is BONK, an asset that experienced a staggering surge since November 2023, with its price skyrocketing by over 17,000% by the end of that year. This group is joined by Book of Meme (BOME) and, more recently, Slerfol (SLERF).
"I find it somewhat strange that people are perpetually online with nothing better to do," commented Solana co-founder Anatoly Yakovenko on the memecoin boom. However, he believes that the widespread use of memecoins tests the network, which is beneficial for identifying flaws. "My estimation is that within five years, there will be a trillion dollars in stablecoins in cryptocurrency, and that's an astronomical amount of real money, so solving all the problems now with memes is a blessing," he added.
Solana stands out for providing more affordable transaction fees compared to other cryptocurrency networks, fostering its usage and project development.
The low popularity of Ethereum does not affect its capitalization.
On the other hand, Ethereum's ecosystem holds the second position in terms of popularity, capturing only 12% of interest among all ecosystems.
According to Yu Qian, this might be because the network established by Vitalik Buterin "is well-established as an ecosystem and is familiar to investors, so it is no longer considered a new and trending narrative."
The report also suggests that attention toward the Ethereum ecosystem "is becoming increasingly scattered" as focus shifts towards layer 2 ecosystems being built on top of it.
Among layer 2 ecosystems, Arbitrum and Optimism have emerged as the most popular, capturing 3.3% and 3.2% of investor interest to date, respectively, the report notes.
While popularity is not Ethereum's current forte, it outpaces Solana in market capitalization. When comparing the total value locked (TVL) between both networks, the difference is vast.
Ethereum boasts a market capitalization of $51 billion, following a steady increase from $21 billion six months ago. This represents a 142% increase in TVL, as depicted in the following graph.
On the Solana side, the Total Value Locked (TVL) stands significantly lower, with just $4 billion, as reported by DeFiLlama.
When examining Ethereum's TVL in detail, the largest share belongs to the Lido staking platform, with $34 billion, according to DeFiLlama. Staking involves depositing ethers (ETH), Ethereum's cryptocurrency, to become a validator and secure the network's operations.
An element that might drive Ethereum's appeal could be the introduction of spot ether (ETH) ETFs in the United States. Moreover, allowing fund managers to stake a portion of the ETF assets could present fresh investment prospects and foster the expansion of the Ethereum ecosystem.
To sum up, Ethereum's ecosystem significantly leads in the TVL race, whereas Solana's ecosystem is considerably ahead in terms of popularity.