Ethereum Killers? A Better Solution

There have been a lot of speculation on many Layer 1 smart contract platforms being labeled as โ€œEthereum Killersโ€ as of lately. But do they actually have what it takes to dethrone the current king?


Ethereum was the first smart contract platform within the crypto world founded by Vitalik Buterin. Having their ICO in 2014. What was initially just an ambitious vision of a platform for autonomous software and applications to run on back in 2014, is now being described as the โ€œWorld Computerโ€ today.

Developers in this space quickly took notice and began building applications on this newfound technology. Then in November of 2017, the first decentralized application launched on Ethereum, the infamous CryptoKitties. This application was essentially for users to trade NFTโ€™s of cute cartoon kittens, the popularity of CryptoKitties was apparent as the network became heavily congested with the amount of demand. Exploding from just under 500 thousand transactions per day to about 1.4 million within the span of a month. The network adoption of Ethereum and smart contract applications was clear and it was growing fast.

The Issues

If youโ€™ve dipped your feet in the crypto space, youโ€™ve likely dabbled a bit with some of these decentralized applications on Ethereum. From decentralized exchanges like Uniswap, to lending protocols like Aave and Compound, youโ€™ve likely seen there is a fee to access these apps called โ€œgas feesโ€. Think of Ethereum like the gas in your car, and the smart contracts are the vehicle that take you to your destination of the chosen Ethereum applications. These fees are essentially what allow for transactions to process through Ethereum, as a portion of these fees are rewarded to miners who secure the Ethereum Network, while a portion gets burnt from the total supply thanks to the recent upgrade of EIP-1559.

As cryptocurrencies have exploded in growth over the past year. While Ethereum has not only exploded in price, the network adoption has followed. With an average of about 1.3 million transactions per day, about the same levels as the peak of the CryptoKitties craze. With the current capabilities to process about 13 transactions per second, the amount of usage thanks to some cute digital kittens brought Ethereum to its knees. As the network becomes more congested, higher fees are required to execute smart contract transactions, basic supply and demand right? Well the problem here is some of these fees have been so absurdly high, many potential and long time participants have either been forced to swallow up fees upwards of $100 for a transaction, or to look for an alternative chain.

Gas Fees

Itโ€™s kind of hard to bring global adoption to a network that is currently charging upwards of $100 to send $60. If the current Ethereum is having theses issues at 175 million users, its hard to imagine what it would look like at 4 billion users.

These issues of Ethereum's scalability issues compared to the demand on the network is what has given birth to these Ethereum killer projects, working to build a solution to offer what Ethereum has without having to cost them an arm and a leg.

While the Ethereum team has attempted to solve this issue through implementations of EIP-1559, as prior to get transactions to be approved first on the network was similar to that of an auction, making average gas fees extremely volatile and unpredictable. Thanks to EIP-1559, the gas auctions are now replaced with a fixed minimum cost.

Though this has not yet solved the hefty gas fee issues, as the base gas fee can still rise up to absurd levels during times of network congestion. Many Ethereum enthusiasts believe that as we transition into Eth 2.0 the issue will gradually be resolved. So will Ethereum be dethroned by another Layer 1 or will Eth 2.0 revolutionize the Layer 1 space?

โ€œEthereum Killersโ€

Many layer 1 smart contract platforms have popped up since Ethereums then. From Binance with their Binance Smart Chain, to Cardano with their research focused and peer reviewed developments, to Solana handling over 45,000 transactions per second. There are about many other many other native blockchains wishing to steal the spotlight. So why does Ethereum still hold a monopoly within these smart contract Layer 1โ€™s when there seems to be so many better alternatives?

There have been instances where some of these Ethereum alternatives have temporarily stole the spotlight. With Binanceโ€™s swap platform PancakeSwap surpassing Ethereumโ€™s network transactions by over 500 thousand transactions within 24 hours. While Solana hasnโ€™t quite surpass Ethereum in terms of volume. It certainly stole the spotlight from all other platforms when Solana as it ran up about 400% in the span of 25 days. There have been many other instances of these competitors possibly taking some of the network usage away from Ethereum, such as Tezos and Avalanche seeing some growth and adoption within their ecosystem.

Eth 2.0?

Eth 2.0 has been one of the most common topics within the crypto space for a couple years now. But will Eth 2.0 solve all the current problems on Ethereum? Well first, lets see what Eth.20 has to offer.

The process of Eth 2.0 can be split into three categories, The Beacon Chain, The Merge, and Shard Chains. The hope for these integrations is to allow Ethereum to be more scalable and environmentally friendly with the promise of over 100,000 transactions, while introducing the Proof of Stake consensus to Ethereum to allow for a new form of security through users staking their Ethereum to secure the network, as the current Proof of Work mechanism is not only expensive to utilize, but is also an environmental issue with the amount of computing power required.

The Beacon Chain will be the backbone of Eth 2.0 and was implemented into the network in December of 2020. The Beacon Chain is currently a chain separate from the mainnet. as it will be the main chain of the new Ethereum, responsible for coordinating all the other chains within the Ethereum network. Its role will be to monitor the activity on the network being validated by shard chains, rewarding validators while actively monitoring and slashing rewards from dishonest validators.

The introduction of Shard Chains into Ethereum will allow for massively improved scalability, as the Shard Chains will be separate chains that run parallel to the Beacon Chain. Each shard will be responsible for easing the amount of volume on the Beacon Chain. While shard chains will be responsible for validating and creating new blocks, the Beacon Chain will be ensuring all Shard Chains are up to date with the correction information. Initially shards will only be able to handle basic transactions, meaning smart contract transactions will still be an issue until Ethereum fully transitions. While shard chains are not quite yet out, they are expected to launch sometime in late 2021 to early 2022.

The Merge will be when Ethereum fully moves to Proof of Stake, Ethereum will merge with the Ethereum 2.0 Beacon Chain and Shard Chains will be fully integrated. Prior to the merge the Ethereum mainnet will become a shard itself, before being implemented into the Eth 2.0 Beacon Chain along with all the other Shard Chains. This will allow Ethereum to become fully Proof of Stake, where shards will be able to process smart contracts, along with customizable shards.

Who Will Be King?

So whose going to come out on top? Will it be Cardano achieving their ambitious promises that takes over? Or maybe Algorand will fulfil their promise of a Pure Proof of Stake system that solves the blockchain trilemma, or maybe a growing chain such as Avalanche begins to steal market share away from Ethereum.

Personally, I donโ€™t believe the approach of one chain to rule them all. There isnโ€™t an individual monopoly bank, nor is there an individual monopoly with Internet and service providers. I believe the future of these smart contract Layer 1โ€™s will be prevalent through multiple chains. Just like how some people choose to use Verizon over AT&T and vice versa. There will be people who wish to use Ethereum over Solana and vice versa.

The real question is, what if instead of competing with each other to be โ€œthe chainโ€, what if all these chains could communicate and interoperate with each other along with legacy systems? Now that sounds like something that would bring global adoption.

So while theres many โ€œEthereum Killersโ€ on the market, what communities should be looking for is a solution to allow all these blockchains with different features to work together.

*None of the information listed is financial or investment advice and should only be taken as entertainment or educational as Iโ€™m not a financial advisor*

About Me

Hey, thanks for taking the time to read my work. Iโ€™m your average 20 year old student, currently in school for Economics and Finance. Some of my hobbies consist of sports, working out and staring at price charts.

I initially began my interest in the crypto space after frustrations with legacy markets. From the second I read about the Ethereum ecosystem, I fell in love. An entire ecosystem built on one platform that anybody can access? Unheard of, until now.

With how fast this space is developing, I try and find projects within this industry that show promise and potential to disrupt our modern world. All this fundamental analysis not only helps me better understand these projects better, but hopefully gives you guys some newfound information!

If there are any projects youโ€™d wish to suggest me take a look into, Iโ€™m always available on Twitter




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