Ethereum Killers

Ethereum is having its moment with the ETH price shooting past $4,000. As the DeFi markets grow and more innovative DeFi projects roll out, with TVL (total-value-locked) in Ethereum-based DeFi protocols standing at $82 billion, the DeFi first-mover Ethereum network grows hand in hand. The second biggest cryptocurrency ETH is rendering far better returns than BTC, with a 440% price increase since the beginning of 2021, compared to BTC’s 92%. However, the ETH price isn’t the only price increasing. The gas fees  have skyrocketed  too. 

Source: Etherscan

As DeFi expands and attracts more users and capital, so-called ‘Ethereum Killer’ blockchains start to have an eye on its throne, aiming to tackle Ethereum’s deep seated problem - scalability. 

This week, we map out networks looking to eat Ehtereum’s pie. The networks we overview are: Binance Smart Chain, Polkadot, Cosmos, Solana, Polygon and Avalanche. The graphic below shows the market cap of each chain’s native token.

Source: Novum Insights up to 11th May

Ethereum’s runner-up is Binance’s BNB. The largest crypto exchange in terms of trading volume ($61.4 billion 24h trading volume) has launched its own blockchain suited for building decentralized applications in September 2020 after the DeFi Summer. Although the market cap of Ethereum Killers all combined cannot beat that of Etherum competitor chains are still making meaningful progress in the DeFi space.

The graphic below maps out Ethereum Killers and the 24h trading volumes of their native token and block time. The sizes of the circles show market caps.

Source: Novum Insights up to May 11th

Binance’s BNB has the highest trading volume of around $6 billion and Polkadot’s DOT chases after BNB with $2.8 billion. In terms of TVL, hot on Ethereum’s heels is Binance Smart Chains with $51 billion. 

Solana is beating all other networks including Ethereum in terms of block time. Block time is the time required to create each block. Solana’s block time is 0.4 second and Solana supports up to 65,000 transactions per second(tps), promising low gas fees. Below we compare tps of some networks. 

Compared to Ethereum’s blocktime of 13 seconds and tps of 15 seconds, Solana’s performance is astonishing. There is currently $1 billion locked in Solana-based protocols, with about 90% of the TVL coming from Raydium, Solana-based AMM DEX. 

Founded by Ethereum co-founder Gavin Wood, Polkadot blockchain architecture uses ‘parachain’ (parallel blockchains) that can run faster transactions and each parachain is customizable. Polkadot’s Substrate framework allows developers to build a new blockchain quickly. Polkadot supports up to 1500 tps.

Polygon is a layer 2 scaling solution of Ethereum and has $4 billion in TVL. Polygon also boasts of up to 65,000 tps like Solana. Well-known projects leveraging Polygon blockchain include Polymarket, one of the most leading prediction markets, Aavegotchi, interest bearing NFTs, and Quickswap. Polygon’s MATIC token has increased by over 20% in the past 7 days. 

Cosmos has launched a new software development kit (SDK) called Stargate that includes the IBC(Inter Blockchain Communication) protocol which will facilitate interoperability. There are more than 200 projects building on Cosmos and the list includes well-known projects such as Terra, Mirror, Anchor, Kava and Band Protocol. 

Avalanche launched its mainnet in September 2020 and has been expanding its network since. Avalanch-based DEXes include Pangolin, Zero Exchange and Pandaswap and a lot of well-known existing DeFi protocols including SushiSwap, bZx, and TrueUSD. Avalanche supports up to 4500 tps. 

Conclusion

Ethereum HODLers are having a great year so far, the first mover advantage was a tremendous plus in the DeFi scene, there are various layer 2 solutions being developed for Ethereum and Ethereum 2.0 kicked off in last December. However, serious contenders keep moving forward  giving no time for Ethereum to relax. 

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