Ethereum may be the top choice because of its stability, security, and sustainable revenue model. Solana’s overreliance on meme coin activity and validator-centric tokenomics raise concerns about long-term viability. Meanwhile, Ethereum gained fresh momentum after the Pectra upgrade triggered a 20% price surge, liquidated over $300 million in shorts, and reignited bullish sentiment. Vitalik Buterin also boosted Ethereum’s outlook by proposing a major protocol simplification to enhance scalability, efficiency, and decentralization.
Investors Still Prefer Ethereum Over Solana
Sygnum, a well known crypto bank group, is very skeptical about Solana’s ability to overtake Ethereum as the preferred blockchain for institutional adoption. In a blog post dated May 8, Sygnum pointed out that despite Solana’s recent surge in transaction volumes and fee generation, it lacks the critical indicators necessary to position itself as a dominant institutional platform.
Solana vs Ethereum volumes (Source: Dune Analytics)
The firm argued that Ethereum’s long standing strengths—like security, stability, and established track record—are still highly valued by traditional financial institutions, and that these qualities are likely to drive decision-making more than short-term market sentiment. Sygnum explained that while Ethereum’s current market sentiment is relatively poor, institutions are likely to lean towards platforms that offer dependable infrastructure for long-term products, which Ethereum continues to provide.
The report raised concerns about Solana’s revenue model, and stated that its income is “highly concentrated in the meme coin sector,” which introduces a lot of volatility and undermines revenue stability. This, according to Sygnum, limits Solana’s potential to outperform Ethereum despite its current fee dominance, because the quality and sustainability of revenue matter more than quantity.
Another area of critique was Solana’s tokenomics. While Solana has become the leading layer-1 blockchain in fee generation, Sygnum pointed out that most of these fees go to validators and do not actually contribute meaningfully to the value of the SOL token.
(Source: Sygnum)
In contrast, Ethereum’s revenue, although facing scaling-related challenges, still surpasses Solana’s by a factor of 2 to 2.5. The bank also noticed that Solana’s community recently rejected a proposal to reduce the token’s inflation rate. This indicates a reluctance to prioritize tokenholder value.
Despite the criticisms, Sygnum still acknowledged that Solana could make up ground if it began generating more stable revenue streams through use cases like tokenization and stablecoins. It did show some success in growing total value locked in its decentralized finance protocols.
Still, Ethereum’s dominance in areas like DeFi, stablecoins, and asset tokenization positions it perfectly for more institutional adoption and growth. The Ethereum Foundation’s recent shift to prioritize its layer-1 roadmap and revamp its market strategy may also help renew confidence in the network.
Ethereum Upgrade Triggers Price Breakout
Ethereum’s price surged by close to 20% in the past 24 hours after the successful launch of the highly anticipated Pectra upgrade. Now, some traders are convinced this could be a pivotal moment for the asset.
ETH’s price action over the past 24 hours (Source: CoinMarketCap)
After a year of lackluster performance and uncertain sentiment, Ethereum is now trading at $2,345, up from $1,472 in early April. The recent rally saw Ether's open interest spike by 21%, and ignited fresh optimism among traders, with some describing the price movement as “insane.” The surge also triggered approximately $328 million in liquidated short positions. This suggests that there were a lot of traders who were caught off guard by the altcoin’s price jump.
The Pectra upgrade went live on May 7, and introduced key enhancements to Ethereum. Some of these changes include improved wallet functionality, higher staking limits, and better scalability.
While some, like trader Alex Kruger, credited the pump to a wave of new long positions, others pointed to a broader confluence of bullish factors. These include US President Donald Trump’s trade deal with the United Kingdom, which reduced tariffs on British imports, and Coinbase’s $2.9 billion acquisition of derivatives exchange Deribit. Nick Forster, founder of the on-chain protocol Derive, believes that these macro developments also played a role in lifting market sentiment.
Despite the strong rally, Ethreum’s momentum still has to translate into gains for spot Ether ETFs, which recorded $16.1 million in outflows on May 8. This was their third consecutive day of net losses.
Historically, Ethereum posted an average return of 62.2% in the second quarter since 2013, which could put it on track for a price near $2,950 by the end of June if the trend holds. The broader crypto market also experienced a boost, with the total cap rising by almost 5% in the past 24 hours of trading. Bitcoin was also able to reclaim the $100,000 mark for the first time in over three months.
Crypto Fear and Greed Index (Source: Alternative)
The renewed bullish sentiment pushed the Crypto Fear & Greed Index deeper into “Greed” territory, now sitting at a score of 73.
Vitalik Buterin Pushes for a Simpler Ethereum
Ethereum co-founder Vitalik Buterin recently proposed a major simplification of Ethereum’s base protocol to enhance the network’s efficiency, security, and accessibility. In a blog post titled “Simplifying the L1,” Buterin argued that Ethereum’s long-term scalability and resilience depend on reducing its technical complexity.
Part of Buterin’s blog post
By drawing inspiration from Bitcoin’s minimalist approach, he laid out a roadmap to make Ethereum’s architecture a lot more streamlined across its consensus, execution, and shared protocol components. He acknowledged that Ethereum’s recent technical achievements, like the transition to proof-of-stake and zk-SNARK integrations, have made the network more powerful, but also more bloated and prone to risks and inefficiencies.
A major part of Buterin’s vision is the adoption of a “3-slot finality” model to replace Ethereum’s current consensus mechanisms. This change will eliminate complex elements like epochs, sync committees, and validator shuffling, and pave the way for simpler implementations of fork choice rules. He also advocated using STARK-based aggregation protocols to simplify network coordination while also increasing decentralization.
On the execution layer, Buterin proposed replacing the Ethereum Virtual Machine (EVM) with a simpler, zero-knowledge-friendly virtual machine based on RISC-V architecture. This change could bring huge performance gains—potentially up to 100x for zero-knowledge proofs—while easing protocol implementation. To make sure there is a smooth transition, Buterin suggested running existing EVM contracts via a RISC-V interpreter during a transitional phase, allowing both systems to operate concurrently.
In addition to technical changes, Buterin called for standardized protocol-wide design choices. He recommended adopting a single erasure coding method, a unified serialization format (preferably SSZ), and a common tree structure to reduce redundancy and complexity across Ethereum’s tooling and infrastructure. He compared simplicity to decentralization and floated the idea of enforcing a maximum line-of-code count for consensus-critical logic to keep the core protocol lean, auditable, and robust.
This call for simplification happened at a time when Ethereum is losing ground to competing layer-1 blockchains. While Ethereum was once seen as the inevitable leader in the crypto space, newer platforms with more efficient architectures are challenging that assumption.
