Choose ETH or SoL? This is actually a role-playing question.
Recently, I collaborated with a very professional research team to write a report comparing Ethereum and Solana. Thus, we dug into Ethereum and Solana across multiple dimensions from underlying technology to ecological status.
Finally, I arrive at a provocative conclusion: old money and dreamers choose Ethereum, while retail investors choose Solana.
Of course, the old money here does not all refer to the traditional sense of Old Money, but refers to the industry old money that has been immersed in the crypto industry for many years, as well as some traditional Old Money (like BlackRock, etc.) that has been attracted by crypto. Of course, even older money may directly choose Bitcoin.
Perhaps you have a different opinion on this conclusion; don't worry, let me clarify it for you.
The blockchain industry has developed for more than a decade, but there has been one fundamental question that has never had a unified answer, which is:
What is the use of blockchain?
This question has been debated back and forth without a standard answer. However, although opinions are varied, they can roughly be divided into three major factions. I call them the 'financial reconstruction faction', 'social reconstruction faction', and 'narrative asset faction'.
The 'financial reconstruction faction' believes that the biggest difference between blockchain and traditional internet is that the internet transmits information while blockchain transmits value; blockchain is the value internet.
What is value transmission? It is allowing funds to communicate on-chain, doing finance on-chain, which is doing DeFi.
Reconstructing traditional finance with DeFi is the goal pursued by the 'financial reconstruction faction'.
Thus, DeFi and derivative financial scenarios based on DeFi (like PayFi, RWA, etc.) are the truly valuable blockchain applications; the 'financial reconstruction faction' believes that doing decentralized social networking and information transmission on the blockchain is a matter of traditional internet and has nothing to do with blockchain.
The 'social reconstruction faction' believes that blockchain is a technology for reconstructing production relations in the digital age, reshaping the social contract of the digital age through decentralized networks and smart contracts, which is the greatest value of blockchain.
Therefore, the 'social reconstruction faction' strongly advocates for DAO, DID, decentralized social networking, decentralized governance, and even non-financial applications like the Metaverse. This faction, ideologically pursuing decentralization, attempts to reconstruct human social civilization using blockchain technology; many may prefer to call it the dream faction or 'utopian faction'.
Regardless, although the two major factions have different views and directions, they all concentrate in the Ethereum ecosystem.
Meanwhile, a new faction has emerged in the Solana ecosystem; I still can't think of a good name for it, so I'll call it the 'narrative asset faction' for now.
The 'narrative asset faction' believes that the greatest role of blockchain is providing a 'permissionless asset issuance environment and borderless trading place', which is the first time in human history. Previous asset issuances were privileges of classes or strict licensing systems. The brilliance of blockchain is that it allows anyone to issue assets based on narratives without permission, creating trading loops based on scenarios, and asset trading is borderless.
In theory, one person, one narrative, one asset can leverage anyone on Earth and circulate to any place.
Some people say, can it be only assets and narratives? What about products? What about value support? Are these not important?
Important, but also not important! All tradable assets are essentially based on narratives and emotional fluctuations, which are irrational and unpredictable. Everything of value is based on collective imagination, and all fluctuations are based on changes in narratives and emotional currents.
The ideology of this faction leans towards financial nihilism, so it can also be called the 'nihilism faction'.
Alright, after discussing the three major factions, let's look at who is participating in these three factions? Understanding this basically helps you find your role.
The 'financial reconstruction faction' of the Ethereum ecosystem currently has more supporters and participants from financial institutions or professionals in finance. Most of its users are old money or institutional funds seeking stable returns.
From the data, the largest financial assets on Ethereum currently are stETH and stablecoins; stETH represents the largest benchmark yield (about 3.6%, roughly equivalent to US Treasuries), while stablecoins represent the largest liquidity medium. The entire DeFi ecosystem essentially revolves around these two core assets for combinations and nesting, including future RWA and PayFi, which are built on these financial foundations. The yield model is also basically stable, merely adding on top of the 3.6% benchmark yield, with stable yield ranges generally between 5%-10%. So, which size of funds is suitable for this yield rate? The result is self-evident.
Looking again, everyone is envious, but is the stablecoin that no one can bite off? The liquidity cost of tens of millions of dollars is a game that ordinary people can play? Not to mention, with a large number of off-chain assets and layers of compliance issues in RWA and PayFi, which one is an opportunity for ordinary retail investors?
So, I say, the 'financial reconstruction faction' is not a role that ordinary retail investors should play.
Then, what about the 'social reconstruction faction'? That is even less suitable for retail investors.
The 'social reconstruction faction' is insensitive to finance and assets, but has great enthusiasm for technology changing the world and for decentralization reconstructing human civilization. Decentralized identity, decentralized social, decentralized organization, and decentralized society are what the 'social reconstruction faction' pursues.
I have always held great respect for entrepreneurs in these tracks; they are the promoters of crypto-native technology and spirit. It is precisely the existence of these ideas that makes Crypto different.
However, I think that the 'social reconstruction faction' is generally only suitable for technical geeks or dreamers with great entrepreneurial enthusiasm; how can ordinary retail investors participate?
Therefore, the outcome seems to be self-evident. The two largest factions in the Ethereum ecosystem basically do not have roles suitable for ordinary retail investors. The seemingly most ethereal 'narrative asset faction' appears to be the role most suitable for retail investors.
The 'narrative asset faction' is not unique to Solana.
Every cycle of blockchain sees the emergence of asset booms driven by narratives and emotions, starting with DOGE, followed by Shib, then Bonk, bome, etc. on the Solana chain, until the Pump.fun paradigm appears in 2024, directly expressing the thoughts and essence of the 'narrative asset faction' to the extreme.
Anyone can create assets based on narratives, with low costs, high speed, and high odds. Moreover, retail investors can not only become investors but also asset issuers; this is true financial equality, and this is the game for retail investors.
Therefore, returning to the initial provocative statement: old money and dreamers choose Ethereum, while retail investors choose Solana.
Do you still think there is something inappropriate? Have you found the role that suits you?
So, choose ETH or SOL? This is not an investment issue; it is actually a role-playing question.
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