Exploring the Real Differences Between ETH and Solana.

Examining the Genuine Distinctions Between ETH and Solana.

Original Author: _gabrielShapir0, Crypto Lawyer Source: X@lex_node Translation: Good-Eubba, LianGuai

I’ve always wanted to write this article since I started researching Solana (and its centralized sources at the DApp level) a year ago. I’ve been pondering these questions.

Overall, it seems to me that Solana seeks to achieve better scalability and composability by shifting costs to DApp teams and infrastructure providers rather than users. This is also the source of SOL’s value wheel.

If the goal of the chain is low fees, then the token value proposition cannot be transaction fees… This contrasts with Ethereum, where the value wheel comes from users needing to pay (and partially burn) ETH for each transaction, which imposes a high cost on users but benefits ETH holders.

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On the other hand, you need some value proposition, otherwise your chain won’t be able to guarantee security… How does Solana address this problem?

–>Charge DApps rent for state (i.e., DApp teams)

–>Charge validators voting fees (i.e., validators must pay to vote for blocks)

These two features, which are absent on Ethereum, create additional value drivers for SOL, to some extent, offsetting the lack of SOL demand from transaction fees and mitigating some security issues (e.g., state bloat).

The problem is: both of these issues tend to limit decentralization (becoming fixed cost growth for validators) or limit autonomy (difficulties in coordinating payment of state rent and community (as compared to DApp developers), immutability of DApps is not a real problem).

The first issue has already been pointed out by @ceterisLianGuair1bus in his excellent Delphi Research article on Solana.

The second issue, we have seen at least one Solana DApp team abandoning their DApp during the bear market.

Aside from tokenomics, there are also concerns about the efficient validator hardware requirements on Solana… However, despite being continually emphasized by ETH maxis, this is not a problem of “centralization” – Solana validators are decentralized (high Nakamoto coefficient).

There’s also the issue of how smart contracts work on Solana and the ensuing centralization/trust issues… Solana contracts use text-on-chain inheritance structure, where, for example, all NFTs are controlled by the main NFT contract governed by Metaplex multisig.

This will create obvious trust issues, but this model also has some benefits as it makes creating new contract standards an entrepreneurial activity and reduces the due diligence burden on users (no longer needing to check the deployment of individual token contracts).

By the way, this also shows that sometimes the cost is hidden… If there are too many rent-seekers, user costs may increase, and Solana provides some opportunities in its structure while Ethereum does not… MetaPlex may forever tax NFT transactions.

At the same time, cNFTs are cool as they make it cheaper for users, with lower overall costs, but shifting these lowered costs to the DApp team to pay for RPC to maintain data means that, just like the state rent problem, Solana DApps may fail the “Bahamas test”.

In all of this, if we say that Solana is more “centralized” than Ethereum, that is a huge mistake… It’s not about decentralization… It’s about autonomy, specifically censorship resistance.

Whereas Ethereum at least theoretically is designed for immutability, autonomy, and censorship resistance and accordingly charges users high fees, Solana is cheap because it shifts more of the security cost to validators and DApp providers…

Therefore, in general, achieving trust minimization from the team becomes more difficult for Solana DApps (affecting autonomy), theoretically, Solana’s economic scale effect on validation should be at least larger than that of Ethereum validators (decentralization).

In addition, we only care about decentralization because it limits autonomy. So the real issue with the high-performance hardware requirement is that Solana validation may be limited to easily attacked or seizable complex data centers, which could lead to a system of censorship.

If you believe the unique selling point of blockchain is censorship resistance/autonomy, then ETH is still a better choice as it better suits the unique purpose that blockchain serves.

However, what if Ethereum is not very good at censorship resistance either? What if Ethereum is not actually very autonomous?

Ultimately, in a PoS system, the basis of autonomy is the community’s willingness to UASF and socially sanction validators who engage in censorship. Unfortunately, Ethereum has not shown much determination in this regard recently when it comes to involving OFAC.

The commercial reality of social sanctioning on PoS is that you are not just sanctioning validators, but also innocent customers of those validators who use staking as a service, if the validators are (many likely are) institutions.

Because Coinbase *complies with the law* and sanctions OFAC’s smart contracts, do a few Ethereum developers really feel comfortable socially sanctioning ETH from millions of dollars worth of Coinbase customers? I doubt it, and it seems Vitalik also doubts it (now advocating for privacy pools).

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