Can These Surging Altcoins Compete With Ethereum? Glassnode Analyzes Three Growing Platforms


Many smart contract platforms have increased their prices over the past 30 days, and blockchain analytics company Glassnode is looking at the metrics to determine if any of these platforms can compete with Ethereum (ETH ) in the future.

avalanche (AVAX), Solana (SOL), and Earth (LUNA) have all exploded in the past month, gaining 292.9%, 212.2% and 191.4% respectively in value, according to CoinGecko.

Glassnode first discuss the “peak of interest” on AVAX and SOL.

“Other smart contract platforms like Avalanche and Solana have seen massive 30-day token price growth as hints of activity and betting on a multi-chain future start to gain attention.”

Glassnode notes that Avalanche had drawn limited liquidity into its decentralized financing (DeFi) projects until early this month, when announcement a $ 180 million DeFi incentive program.

The Avalanche Foundation has allocated the first $ 27 million to users of the Aave Lending and Borrowing Protocol and the Decentralized Exchange Curve (CRV). The analyst firm highlights the exponential increase in liquidity in AVAX’s DeFi projects since the announcement of the incentives.

Source: Glassnode

Glassnode also says, however, that liquidity on Avalanche remains relatively limited.

“The projects on Avalanche continue to be characterized by being clones of existing projects on Ethereum, attracting that growth through inflated incentives and returns that may or may not persist over the long term.”

Solana focused on DeFi protocol implementations, which boosted the growth of its ecosystem, according to Glassnode. Solana also has a processing capacity of between 50,000 and 65,000 transactions per second, which allows the network to adapt.

Still, the growth of the Solana ecosystem is very limited compared to Ethereum, according to the analytics company.

“There are five projects in the Solana DeFi space which have more than 100 million TVL [total value locked]. For comparison, Ethereum has over 60 projects with over 100 million TVL.

Solana certainly presents an interesting alternative option for projects requiring scaling up. Although for now it has barely scratched the surface in competing with Ethereum for full liquidity.

Terra has shown “significant signs of adoption in a few select protocols,” says Glassnode. Anchor Protocol, Terra’s largest DeFi protocol, has a total blocked value of over $ 3.4 billion.

Like Solana and Avalanche, Terra has yet to host more than five projects with more than $ 100 million in cash, according to the analytics firm.

“While some alternative Layer 1 smart contract platforms have seen their native tokens rally in recent weeks, the actual liquidity on each chain remains limited compared to the Ethereum chain.”

Glassnode sees a world in which more and more users are migrating to these platforms, especially if Ethereum is struggling to scale its network.

“As some users move to newer, more experimental blockchains, developers will need to assess the viability and longevity of additional users and capital entering or leaving Ethereum.

As competition for users, attention, and capital increases, many developers and protocols may find the trade-offs worth it, or even find untapped value and opportunities in protocol design. And if Ethereum L2s struggle to scale the network or create a significant barrier to user experience, users can naturally turn to alternative channels in response.

View the full Glassnode report here.

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