Original author: ryanberckmans
Original translation: zhouzhou, BlockBeats

Editor's note:The author of this article discusses the impracticality of Solana as the core of the global financial system. Solana requires too much bandwidth, which limits its applicability worldwide; and there is a high risk of downtime in the future, and there is a lack of continuous operation mechanism; Solana's token distribution is too centralized, resulting in insufficient economic decentralization and lack of broad economic support; while Ethereum can achieve settlement of more chains through zk aggregation, Solana lacks scalability.

The following is the original content (the original content has been reorganized for easier reading and understanding):

The core of the global financial system - Ethereum

Ethereum is the core of the new global financial system, connecting L2 and L1 applications, and no other chain can match it. Mert suggests Solana could transition to become this core, but Solana will never be this core.

Four years ago, Ethereum transitioned to become the core of the global financial system, focusing on the development of L2 and L1 applications. Ethereum’s core strategy is increasingly recognized as a top L1 strategy, which is a brilliant move - although it is still early days, if you look closely, you can see some signs, such as imitation is the sincerest flattery, and L2 dominance.

Solana has performed well in degen/meme growth and SOL price at this stage, but I think Solana’s leadership is beginning to realize that L2 has the potential to cannibalize market share of other L1s. Now, they seem to be suggesting that Solana can also transition to become a core similar to Ethereum.

But fundamentally, Solana is not suitable to be a L2 core, or even host world-class L1 activities.

Here’s my detailed explanation:

First, let’s explore how Solana leadership has gradually acknowledged the excellence of Ethereum’s L2 Core strategy, and the idea that Solana might transition to Core.

Initially, Solana claimed that they would serve the world extremely fast and at low fees, intending to have the entire world use a single Solana chain. This was their era of “singularization,” a term they once promoted but that has since become somewhat untrue (because in reality, no single chain can serve the entire world). Their marketing has shifted to using the term “integration.”

Then in the middle of this year, Solana admitted that L2 was the right solution. Solana’s leadership noticed that some flagship applications began to build custom L2 application chains on Solana - this is because customers like the control and customization that L2 brings, while being able to participate in the larger ecosystem without having to run the consensus mechanism themselves.

Earlier this year, a well-known Solana community member wrote a fierce post on social media emphasizing the need for Solana to adopt L2 - at the time, the Solana community reacted strongly to this because their leadership had not yet admitted that L2 was inevitable.

In addition, a major Solana development team began to shift to building SVM L2 on Ethereum (transitioning from Sol L1 applications to Ethereum L2), and finally Solana’s leadership began to lean towards L2. (It’s worth noting that rather than acknowledging that Ethereum got L2 right a long time ago, Solana is claiming that their L2 isn’t really L2, but is in fact “network scaling”. This is a major shift in marketing.

Similar to Solana’s recent concept of “real TPS”, they had to invent this concept because for years they had widely misleadingly reported Solana’s TPS on many information sites, including 80% of consensus overhead. Many sites still claim Solana’s TPS is 3000, but it’s actually around 750TPS.

Their new “real TPS” is an attempt to address the long-standing problem of reporting “wrong TPS”, and my view is that Solana’s claims should be carefully scrutinized by anyone serious about on-chain investing — many of them don’t hold up under scrutiny.)

Fast forward to this month, and Solana’s leadership is beginning to discuss how to simply transition to Ethereum’s core strategy. Why is Solana beginning to lean towards Ethereum’s core strategy? Why now?

Because now everyone obviously realizes that the world needs a lot of new chains, and L2 is usually more cost-effective than other L1s (this is why Coinbase, Kraken, Sony, EVE Online, etc. choose L2), therefore, becoming the core of L2 is a top strategy. So, can Solana transform into a core? No, this strategy is not feasible for Solana.

The reasons are as follows:

In reality, Solana is facing a serious dilemma in terms of technology and economic strategy.

1. Solana’s speed and cost cannot meet the upcoming global demand.

2. Solana is not decentralized enough to attract truly huge capital.

3. Solana cannot become a competitive global core for L2.

4. Solana bundles consensus and execution together in a way that is slower and more expensive than just execution. Therefore, the most scalable L2 (which only needs execution and not consensus, while benefiting from the network effect of the trust combination across all L2s) will soon surpass Solana in speed and cost. For example, MegaETH.

5. This is very critical: Solana will not only fail to become a core, but will soon no longer even be the fastest or cheapest chain.

To some people (including many investors), Solana may now look like the "best choice" - better than Ethereum. But that couldn’t be further from the truth. Soon, Solana will not be good at either one, on a technical or economic level.

While ETH may be at a disadvantage in the scale war against BTC and SOL so far (the season is not over yet), Ethereum has been playing a much deeper game, in the manner of a chess game rather than a checkers game. Ethereum is on its way to capturing the majority of growth on-chain and achieving global adoption because Ethereum scales the way the world actually works — through L1 core and L2 markets.

In summary, Ethereum has long proven that being core is undoubtedly the best L1 strategy. While Solana’s leadership may hint that they can be core, they can’t actually do it.

Five Reasons Why Solana Will Never Be Global Core

1. Lack of True Client Diversity

Client diversity means that your chain is run by multiple independent programs in parallel. This helps to a great extent prevent attacks (multiple independent development teams and programming languages) and accidents (multiple code bases, as bugs are often confined to a single code base).

Client diversity is a must for becoming a global core. To achieve client diversity, no single program can control the stake of a majority of validators. This requires at least three independent chain clients, and a balanced stake between them. At the same time, a PDF protocol specification and research community upstream of the chain clients is required. The protocol specification defines the "definition" of the chain, as well as the correctness and reliability of that definition, ensuring that all clients are working towards the same rigorously specified goal.

Currently, Solana has only one production client (agave rust). Solana is trying to build a second client (firedancer), but progress is slow due to the lack of a real protocol spec and research community, and the fact that the agave rust client is highly optimized and strongly dependent on the underlying hardware, making it extremely difficult to extract the low-level design and convert it into a PDF protocol spec and then re-implement it in a new client.

firedancer is still a long way from being able to run 50% of the stake in production. Personally, I think this will take years rather than months.

Even if Solana launches firedancer in production, they still haven't achieved client diversity. To do this, they need at least a third production client (so that no single client controls more than 50% of the stake, which two clients cannot achieve), with balanced stakes between the three, and all three clients must be 100% original code bases with no code overlap, development team overlap, code dependency/library overlap, and use different programming languages.

Ethereum has four production chain clients that meet these criteria and have been doing so for years.

2. Centralization Risk Due to High Bandwidth Requirements

Solana’s chain requires very high bandwidth (they recommend 10Gbps upload speeds), which in reality adds significant centralization risk. The goal of the Global Core is to minimize all forms of risk, so imposing extremely high bandwidth requirements is not feasible.

High bandwidth requirements are difficult to get around. You can buy a big computer and ship it anywhere, but in many areas, especially outside of a controlled enterprise data center or VPN, it is not possible to get 10Gbps upload speeds.

The Core must be able to run almost anywhere. The credible threat of being able to run the Core anywhere — or even avoiding data centers altogether in the future — is a critical part of risk mitigation. 10Gbps is Solana’s current recommended upload speed, but this requirement will increase over time. For Solana, the bandwidth problem is not going to improve over time.

3. High risk of future downtime

Solana has been suspended many times before, lacking the protocol-level fallback mechanism of Ethereum to continue generating blocks even if the "final confirmation" cannot be completed.

When 200 countries with $100 trillion in assets trust a global core, it is very important that the core can always deliver on its promises, including never going offline.

4. Lack of Economic Decentralization

About 2% of SOL was sold publicly during the TGE/ICO, which means that about 98% (!!) was internally distributed. Ethereum sold 80% of its tokens in the early days, and then after seven years of high inflation PoW mechanism, ETH was distributed very widely because miners had to sell almost all ETH to pay mining costs.

Solana is relatively centralized from an economic and operational perspective. This adds significant risk and reduces its suitability as a global core.

5. zk-proof aggregated L2 settlement

zk-proof aggregated L2 settlement means that the L1 global core has no reason to sacrifice even a little decentralization for additional scalability. Although Ethereum L1 is not focused on executing expansion, every L2/L3 in the world, even hundreds of thousands of chains, will be able to settle on Ethereum through zk aggregation.

And Solana’s focus on L1 execution scaling is a burden on the global core in terms of maximizing decentralization and trusted neutrality.

To sum up, Solana will never be the core of the new global financial system.

Personally, I believe that Solana will not even be “a” core because Solana’s annual average market share will continue to decline on key hard-to-control metrics such as non-local application capital or major enterprise integration. Because on-chain, the world is generally better suited to use Ethereum’s L2 or L1, rather than Solana or any other chain. If you don’t believe me, ask Coinbase, Kraken, Sony, Visa, Buenos Aires, and many other existing and upcoming enterprises and governments.

Anyone who conducts serious on-chain due diligence will find the points I made above, including those seeking to invest or build - which will soon include all enterprises and governments around the world.

Ethereum is at the heart of the new global financial system, and no other chain can match it, including Solana. L2 is destroying the market share of other L1s and distributing ETH as a currency, and ETH will accumulate significant value as a result.

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