- Ongoing scalability war between Ethereum and Solana ensues.Analysts consider the SOL ecosystem inferior due to its centralization.
- Ethereum replaces USDC as the primary collateral for decentralized stablecoin DAI.
- Ethereum Triple Halving author expects further squeeze in Ethereum when price-insensitive buyers execute trades with smart contract risk.
Ethereum supply has turned deflationary, with burned ETH tokens exceeding the issuance. Analysts expect negative issuance and exploding on-chain activity to trigger the "Ethereum Triple Halving."
Solana to face tough competition when Ethereum scalability explodes
Solana's fast transaction processing and cheaper fees are driving a spike in the altcoin's adoption and utility. Analysts have noted an increase in capital inflow to Ethereum and Solana. The Solana vs. Ethereum debate is picking up steam, and the author of "Ethereum Triple Halving," Nikhil Shamapant, believes that Ethereum remains superior to Solana.
Shamapant argues that Ethereum developers and maximalists view Solana similarly to Tesla's opinion on LiDAR (light detection and ranging technology). The electric car company uses their technology for ranging and considers LiDAR expensive, redundant and unreliable.
The Ethereum Triple Halving author states,
In this case, for instance, SOL is more scalable than ETH today, but less scalable in 6 months when Zkporter comes out and even less scalable in a few years; when sharding comes out.
The analyst believes that the arrival of "sharding" and zero-knowledge tech on Ethereum is set to fuel its scalability.
In this case, for instance SOL is more scalable than ETH today, but less scalable in 6 months when Zkporter comes out and even less scalable in a few years when sharding comes out— squishchaos.eth (@SquishChaos) November 2, 2021
Proponents have criticized Solana for its centralization, while Ethereum fights centralization at the expense of high gas fees and relatively high transaction processing time compared to SOL.
The implementation of EIP-1559, the London Hard Fork, is expected to continue squeezing Ethereum supply through burn. Over $3.17 billion worth of ETH tokens have been burned, and the altcoin turned deflationary over the past week.
Ethereum's Triple Halving, or the event of a supply squeeze that reduces ETH tokens in circulation (equivalent to three consecutive Bitcoin halvings), is drawing close as the altcoin's on-chain activity rises.
Large wallet investors that are considered insensitive to prices are executing high-value smart contract transactions. Historically high volume purchases and demand from whales have triggered massive liquidations in short-sell orders on derivatives exchanges.
An Ethereum supply squeeze is expected to set "Triple Halving" in motion and drive ETH price higher.
FXStreet analysts have evaluated ETH prices and predicted that the altcoin is expected to continue pushing higher toward $5,400.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.