Ethereum co-founder Joseph Lubin questions the viability of other cryptocurrency projects receiving huge injections of capital.
One of Ethereum’s main competitors is Solana, which has faster transaction times and lower transaction costs. Lubin told the Financial Times that Solana pays disproportionate rewards to users who validate transactions on the network, in relation to the income generated from the transactions. Hence, he believes that Solana needs to come up with a more sustainable business model. “That’s natural,” he said. “All the projects in our ecosystem essentially fake it until they make it, or they die.”
Lubin is not the only dissenting voice. Other critics have chimed in, claiming that Solana compromises security in a bid for greater efficiency. One of the reasons Solana is able to trump Ethereum on transaction throughput and lower transaction costs is that it does sacrifice a degree of decentralization, a critical pillar underpinning blockchain technology. This does make it more vulnerable to outages, affecting user experience, perception, and adoption.
Solana hits back at Lubin
Solana hit back at Lubin’s comments, saying that looking at revenue doesn’t accurately predict the long-term performance of a blockchain’s economic model.
Lubin’s comments come against the backdrop of increased capital injection into more efficient Ethereum alternatives, such as Solana, Avalanche, and Near Protocol, as cryptocurrencies garner mainstream attention. Ethereum has, however, captured most of the decentralized finance industry, and the most non-fungible tokens are built on top of Ethereum.
Metamask sees $330M raised in transaction fees
It is worth noting that Lubin heads up ConsenSys, a company worth $7B with intricate ties to Ethereum. ConsenSys creates products that reduce friction for users needing to interact with the Ethereum blockchain. One of its flagship products is MetaMask, a cryptocurrency wallet, which is essentially a record of special sequences of numbers, called keys, used in transacting with crypto. Almost $330M in transaction fees have passed through MetaMask since 2020 via a feature allowing users to swap tokens on Ethereum. Lubin created ConsenSys Software as part of a restructuring process in 2021, with the help of Wall Street titan JPMorgan Chase.
Close to three dozen former employees of ConsenSys software’s predecessor ConsenSys AG requested an audit of the restructuring, arguing that the intellectual property associated with MetaMask and other flagship products was undervalued. Lubin responded by saying that ConsenSys had been transparent in negotiations with the former employees, “understanding their concerns.”
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