A16z sees Ethereum’s popularity as a “double-edged sword”
- A16z said Ethereum’s overwhelming shares help explain why its users are willing to pay over $15 million in fees to use the blockchain.
- Outside of Ethereum, the report focuses on topics like stablecoins, decentralized finance (DeFi), cryptocurrency adoption rates, and Web3 development.
- According to the report by Andreessen Horowitz, Ethereum manages 5.5 million addresses responsible for 1.1 million routing transactions.
Unparalleled demand and development on Ethereum
Venture capital fund mammoth A16z Crypto pointed out that demand and development on the Ethereum blockchain is “unmatched” despite the network’s rising transaction fees.
The organization warns, however, that its “popularity is a double-edged sword” given that Ethereum is primarily focused on decentralization rather than scaling, resulting in competing blockchains that capture market share with promises of lower costs and improved performance.
Outside of Ethereum, the report focuses on topics like stablecoins, DeFi, crypto adoption rates, and Web3 development.
According to data from the report, Ethereum dominates the competition when it comes to builder interest, as the network has around 4,000 active monthly developers, unlike Solana in 2nd place with 1,000. Cardano and Bitcoin are next at around 400. and 500 coin, respectively.
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Demand for Ethereum can be observed within approx. transaction fees paid on the blockchain over an average of 7 days. According to the data, Ethereum is responsible for $15.24 million. By comparison, Solana, Polygon, Fantom, Avalanche, and BNB Chain are responsible for around $2.5 million in combined fees.
The report highlights that L2 scaling solutions are fighting to reduce Ethereum fees and speed up transactions while highlighting that much-anticipated updates are coming to Ethereum to make the network more profitable and efficient.
However, the highly anticipated upgrades may not happen soon, and a16z also pointed out in the report that on an average of 30 days on May 12, transactions and active addresses on competing blockchains involving Polygon, Solana and BNB are already a step ahead of Ethereum.
The data represents this, Ethereum 5.5 million active addresses which are responsible for 1.1 million routine transactions, while Solana has a whopping 15.4 million active addresses and 15.3 million daily transactions. The BNB channel is in 3rd place with 9.4 million and 5 million, while Polygon has 2.6 million and 3.4 million.