Grayscale released a new report comparing Ethereum to New York City, Solana to Los Angeles, and Avalanche to Chicago

Home / Grayscale released a new report comparing Ethereum to New York City, Solana to Los Angeles, and Avalanche to Chicago

Digital asset manager Grayscale released a report on smart contract platforms that compares Ethereum (ETH) blockchain to the best and worst parts of New York.
The report compares the Ethereum network to new competing blockchains such as Solana (SOL), Avalanche (AVAX), Polkadot (DOT), Cardano (ADA) and Stellar (XLM).
In a section called “digital cities,” Grayscale analyzed Ethereum, Avalanche and Solana. The company compared Ethereum to New York City, noting that they have similarities with the problems arising from their status.
“Ethereum is similar to New York City: it’s huge, expensive and congested in certain areas. However, it also has the richest app ecosystem with more than 500 applications totaling more than $100 billion, more than 10 times the value of any other competing network. Users and developers take comfort in the fact that Ethereum is likely to continue to be a center of gravity for innovation and liquidity because of the size of its community and the amount of capital locked up in the network’s smart contracts. A Tier 2 solution like Polygon is comparable to a skyscraper in New York City: it scales by building upward,” the report said.
The company suggests that moving users to competing blockchains is like moving to a cheaper city because of high gas fees and network congestion in Ethereum caused by the huge demand for decentralized finance (DeFi) and NFT services.
“As Ethereum commissions began to exceed $10 per transaction, smart contract platforms such as Stellar, Algorand, Solana and Avalanche experienced a significant increase in the daily number of transactions on the network,” the report noted.
Grayscale also characterized Solana as Los Angeles. The report said Solana is a structurally different network that is faster and focused on different use cases.
“Solana’s architecture is based on a different consensus mechanism that prioritizes speed and lower fees, albeit at the expense of greater centralization – instead of scaling through tier two chains, Solana runs transactions through a fast tier one chain. As of March 15, 2022, the network is running about 2,300 transactions per second,” the report said.
For its part, Avalanche has been compared to Chicago. Its economy is similar to New York City, but it has a smaller network, cheaper transactions and less congestion, and its development itself is more centralized.
“Game-specific sub-networks like Crabada and partnerships with firms like Deloitte should offer more differentiation over applications on other networks, helping Avalanche create a distinct identity going forward,” Grayscale wrote.

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