Silicon Valley-based venture capitalist Andreessen Horowitz (a16z), dropped its first edition of annual report which covers the state of the cryptocurrency market. While discussing new developments in the industry, a16z said that Ethereum continues to dominate the web3 space but could face competition from a few other projects that showed a similar growth trajectory.
“Ethereum dominates the web3 conversation, but there are plenty of other blockchains now too. Developers of blockchains like Solana, Polygon, BNB Chain, Avalanche, and Fantom are angling for similar success. “
The report said that Ethereum’s position at the top of the crypto ladder was largely based on first-mover advantage and an evergreen community. As a result, developer interest in Ethereum was leaps and bounds above its other competitors – Ethereum has nearly 4,000 monthly active developers while the second closest was Solana with 1,000 users and Bitcoin with 500.
However, a16 added that Ethereum’s decision to pick decentralization over scaling was to allow smaller competitors to attract users by levying lower gas fees and offering faster transactions. The network also faced competition from blockchains offering interoperability as well as ‘layer 2’ technologies cut down on costs by expanding available block space.
How close are other projects to Ethereum
Indeed, several projects have gradually risen to the upper echelons of crypto following Ethereum’s success. The likes of Solana, Cardano, Avalanche, BNB, and Polygon have amassed a large userbase and some even carry distinct network advantages over Ethereum. But have they really outshined the market leader?
Well, in terms of on-chain revenue, Ethereum was still the most-valuable blockchain in the world. It recorded a 30D revenue of $646 Million in April according to Cryptorank, handily beating the second-highest BNB chain by nearly $600 Million. Bitcoin held the 4th position with a 30D revenue of $12.5 Million.
Furthermore, in terms of average daily issuance, Ethereum maintained an edge over Bitcoin. The amount of coins created by a particular network minus the amount that is destroyed is known as issuance. In short, the average daily issuance indicates the utility of a network in terms of transactional activity.
Moving onto NFTs, smaller projects were yet to challenge Ethereum’s dominance. The leader houses some of the biggest and most well-known NFT marketplaces in the space, including the world’s largest NFT platform, OpenSea.
As per data tracker Cryptoslam, Ethereum was at the top in terms of blockchains by NFT sales volume. Axie Infinity and Solana came at a distant second and third position.
By a16’s own admission, Ethereum remains the leader but its position is not entirely secure, with many projects hot on its heels. However, the flip doesn’t seem to be coming anytime soon, and rest assured, smaller rivals still have a small mountain to climb before challenging ETH’s dominance.