According to a new report from venture capital giant Andreessen Horowitz (a16z), the world's second most valuable blockchain network Ethereum is still a leader in Web3 as it started early, but other blockchains like Solana are trying to catch up with Ethereum.
Andreessen Horowitz is among the most prominent venture firms in the crypto industry, supporting numerous projects including Avalanche (AVAX), Celo (CELO), MakerDAO (MKR), Solana (SOL) and others.
Ethereum, Solana and Bitcoin...
According to a16z, a large part of Ethereum's success in the Web3 space may be due to its early launch compared to its competitors. The report stated that, thanks to this, the blockchain has a higher monthly active developer count than any other, with around 4000 developers. The report stated that this is important for such a young project.
“It is this awareness that explains why Ethereum users are paying more than $15 million in total daily transaction fees.”
In contrast, Solana ranks second with an average of 1,000 active developers per month, while Bitcoin is the most valuable blockchain network, with 500 active developers per month, making it the third most popular blockchain among developers.
"Popularity Has a Price"
Ethereum's popularity among developers comes at a price. According to the venture capital firm, Ethereum's emphasis on decentralization over scaling means that other blockchains can attract users by promising faster transactions and lower fees.
Users are turning to layer two networks that use technologies such as optimistic rollups and zero-knowledge (zk) rollups that seek to reduce costs by increasing available block space from Ethereum's base layer.
"There Will Be Many Winners"
The report said that users' transition to layer two and sidechains means that blockchains are encountering a new "wave of programming", as was the case with PCs in the 90s and 2000s.
"There is a lot of room for innovation and we believe there will be many winners."
Finally, the report stated that we are still in the early days of Web3's development.
Using the internet as an analogy, a16z said that with around 50 million active Ethereum (ETH) users currently, this puts Web3 in the position where the internet was in 1995 in terms of development.
"The Internet reached 1 billion users in 2005, when Web2 began to take shape, at the time of the founding of future giants such as Facebook and YouTube."