Cryptocurrency Analyst and Ethereum Influencer David Hoffman picked out There is a disconnect in Solana related to the amount of SOL issued and the fees charged by the network. Hoffman said on social media platform
Is Solana paying too much for higher bandwidth?
Huffman’s collapse means that, unlike other popular networks like Bitcoin or Ethereum, Solana is paying a high price for bandwidth costs. In blockchain, bandwidth is the amount of data that can be transferred per second. This number varies across legacy networks, including Ethereum and Bitcoin, with some of the lowest in the space.
Solana, like Ethereum, supports smart contracts but has higher processing speeds, making the network more scalable. Looking at other metrics (including TPS), Solana has over 4,800, while Ethereum can only handle 15 at its peak.
Additionally, bandwidth data shows that Solana can process an average of 125 MB of data at spot rates, while Ethereum underperforms and can only process 0.08 MB per second. In a public network, bandwidth directly affects the TPS of the network and affects scalability. The higher the bandwidth, the greater the blockchain’s ability to process transactions.
Ethereum’s scalability has other far-reaching implications, particularly in terms of fees incurred, directly impacting revenue. Ethereum, for example, tends to struggle when activity surges, forcing gas fees to be higher and helping the network earn more revenue on behalf of validators.
Solana’s high TPS, on the other hand, translates into relatively low transaction fees, meaning validators receive lower revenue regardless of demand conditions. This correlation appears to be the basis of Huffman’s argument, as the bandwidth of a blockchain is directly affected by the number of validators deployed.
Ethereum generates 70 times more daily fees than Solana
Data confirms that Ethereum generates the highest fees among cryptocurrencies. The fees paid are directly affected by activity and scalability, with users having to pay more for on-demand block space in Ethereum.
As of September 26, Ethereum and Bitcoin—the first generation blockchains—Generated $2.8 million, with costs exceeding $869,000. Solana, meanwhile, charges about $39,000 in fees, which is roughly six times lower than fees generated by the BNB chain and significantly less than protocols launched in Ethereum. Uniswap v3 on Ethereum generated over $569,000 in fees.
Solana developers plan to launch Firedancer validator client promise 10x bandwidth. New customers plan to adopt new transaction processing models and unique data structures to improve performance. Whether it will be adopted remains to be seen. However, if it gains traction, Solana will have higher bandwidth and scalability, resulting in lower fees.
Feature images from Canva, charts from TradingView