According to BitMEX crypto exchange co-founder Arthur Hayes, there are currently many indications that Solana, Cardano and Co. will never replace Ethereum as the top dog in the smart contract space.
In an interview with Crypto Banter, Hayes, who has often made headlines in the crypto scene, talked about the current market situation and explained why he is so convinced of Ethereum. Because according to him, Ethereum’s competitors have the potential to develop well in the years to come.
But in the long term, according to Hayes, Ethereum is unlikely to be replaced by other smart contract platforms.
Why is Arthur Hayes bullish on Ethereum?
One of the main reasons Hayes is so bullish on ETH is the huge community of developers behind the smart contract platform. This is so huge compared to Cardano, Solana and other layer-1 blockchains that most innovation in the smart contract space will continue to take place in the Ethereum ecosystem for the foreseeable future, according to Hayes.
Characteristics such as transactions per second (TPS), i.e. the throughput of transactions a blockchain can handle, are significantly less important to the long-term success of a smart contract platform.
Not everything is based on transactions per second or […] the other stuff. It’s about the talent of the developers. Ethereum has a few thousand developers. The next blockchain could have a few hundred.
Arthur Hayes, former CEO of Bitmex
Additionally, Hayes believes that while most Layer 1 blockchains simply copy ETH applications, true innovation is rare.
This would have worked in the past, but over time more and more investors would realize that this alone is not enough to establish themselves in the crypto market for the long term.
What does the data say?
As for the number of developers, Hayes is not wrong. A total of 1,900 developers are currently actively involved in the development of the Ethereum ecosystem on average every week. Polkadot has 886, Cosmos 497, Solana 401 and Bitcoin only 322.
The situation is different in the area of DeFi and NFTs. ETH has by far the largest DeFi ecosystem in the crypto space at over $31.6 billion and is responsible for approximately 58.17% of all DeFi funds.
However, over the years, Ethereum has lost market share in DeFi. As of August 2020, the smart contract heavyweight was still responsible for around 95% of all DeFi capital.
However, if you look at the trend since May 2022 and add up the TVL share of various Ethereum Layer 2 platforms, Ethereum has again been able to extend its lead in the DeFi space in recent months.
However, the situation is different in the NFT sector. Ether is also responsible for 65% of the overall market here, but Solana in particular was able to increase its market share significantly in the last quarter – by 13% according to Binance.
More information about this in the following article:
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