Ethereum is like the best and worst parts of New York: Grayscale

Digital plus manager Grayscale has published a study connected astute declaration platforms successful which it likens the Ethereum (ETH) blockchain to the champion and worst parts of New York City.

The study examines the granddaddy astute declaration web Ethereum successful comparison to newer competing blockchains specified as Solana (SOL), Avalanche (AVAX), Polkadot (DOT), Cardano (ADA) and Stellar (XLM). The study comes successful the aftermath of the steadfast launching a crypto fund dedicated to astute declaration platforms excluding Ethereum.

In a conception titled “digital cities,” Grayscale analyzed Ethereum, Avalanche and Solana. The steadfast compared Ethereum to the Big Apple, noting that they some stock similarities with issues that originate from their stature:

“Ethereum is similar New York City: it is vast, expensive, and congested successful definite areas. However, it besides features the richest exertion ecosystem, with implicit 500 apps that bid a full worth of implicit $100 billion—more than 10x larger than immoderate different competing network.”

“Users and developers instrumentality comfortableness that Ethereum volition apt proceed to beryllium the halfway of gravity for exertion innovation and liquidity owed to the size of its assemblage and the magnitude of superior locked into the network’s astute contracts. An L2 solution similar Polygon is comparable to a skyscraper successful NYC: it scales by gathering upwards,” the study added.

The steadfast went connected to suggest that users moving to competing blockchains is similar moving to a cheaper metropolis owed to the precocious state fees and web congestion connected Ethereum caused by overwhelming request for decentralized concern (DeFi) services and nonfungbile tokens (NFTs) implicit the past 2 years.

“As Ethereum fees began to eclipse $10 per transaction, astute declaration platforms similar Stellar, Algorand, Solana, and Avalanche experienced beardown maturation successful regular on-chain transaction counts,” the study read.

Grayscale described Solana arsenic similar Los Angeles, noting that it is simply a “structurally chiseled web that is speedier and focuses connected antithetic usage cases” specified arsenic on-chain bid books specified arsenic Mango Markets, which requires accelerated transaction speeds and debased fees to operate.

“Solana’s architecture relies connected a antithetic statement mechanics that prioritizes velocity and little fees though astatine the outgo of much centralization — alternatively than scaling done L2 chains Solana runs transactions done a speedy L1 chain. Running astir 2300 transactions per 2nd arsenic of March 15, 2022,” the study reads.

Avalanche was compared to Chicago successful that its system is akin to NYC, but has a smaller network, “transactions are cheaper and little congested, and improvement is much centralized.”

“Game-specific subnets similar Crabada, and partnerships with firms similar Deloitte should connection much differentiation compared to apps connected different chains, helping Avalanche trade a chiseled individuality moving forward,” Grayscale wrote.

Related: Grayscale gears up for ineligible conflict with SEC implicit Bitcoin ETF

Regardless of the comparisons, Grayscale emphasized the bullish usage cases for astute declaration platforms moving forward, with the steadfast pointing towards DeFi and the up and coming Metaverse assemblage successful particular:

"The marketplace accidental for DeFi and Metaverse applications combined, successful our opinion, is apt larger than the $2 trillion marketplace headdress of the full integer assets marketplace today.”

“Smart declaration platforms are the operating furniture that DeFi and Metaverse applications physique connected and leverage for transactions, yet driving worth to the basal concatenation arsenic users accumulate autochthonal tokens for fees," the study added.