On May 12, Solana generated more Total Economic Value (TEV) than Ethereum in a single day. This is the first time Solana has surpassed Ethereum in its history, but there is always a catch.
On May 12, Solana generated more Total Economic Value (TEV) than Ethereum in a single day. This is the first time Solana has surpassed Ethereum in its history, but there is always a catch.
Breaking down the data
According to Blockworks Research, Solana generated $2,248,681 in TEV on May 12, surpassing Ethereum’s $1,977,416. TEV combines transaction fees and miner/extractor value (MEV). TEV is often used to analyze the utility and adoption of a blockchain network.
Chris Burniske, former analyst at Ark Invest, commented on the whole thing and stated that we should keep an eye on L1s that maintain their annual expansion in the form of TEVs. A higher TEV can indicate higher usage and demand, which, in turn, can provide more flexibility in network economic policies.
There is a problem
However, the achievement has sparked some debate between Solana and Ethereum users. Critics argue that comparing Solana’s TEV to Ethereum’s without considering layer 2 (L2) solutions is misleading. L2 solutions are built on top of Ethereum to improve scalability and reduce fees, effectively offloading some of the activity from the main Ethereum blockchain (L1), while still being a crucial part of it. As one commenter noted: “Given that some ETH activity has moved to L2s, wouldn’t we include it? Come on Chris, this is simply false if L2s are not taken into account.”
Despite the criticism, comparing TEV between blockchains is still valuable. As Burniske explained, each L2 operates in its own blockspace environment, and TEV comparisons are typically made from L1 to L1. However, some may disagree with this approach and consider L2s to be an inseparable part of larger ecosystems like Ethereum, which has struggled due to high fees in the past. For now, Ethereum fees sometimes fall even below Tron’s.
