Thread by @kaiynne

Something I’m a little concerned about given the recent interactions I’ve had with the BSC and SOL communities is that they seem to be genuinely gaining organic traction. Much more so than say EOS or Tron last cycle. I have some thoughts about this…

Firstly Solana is pretty clearly an upgrade on the previous generation of ETH killers. Primarily because they have managed to hide the scaling trade-offs much more effectively.

The likelihood of EOS devolving into plutocracy was called out by many people including Vitalik pretty early on, but obviously the reality was even worse than most people including myself expected. And it was fairly easy to point out where they had forsaken decentralisation.

BSC on the other hand is like a natural experiment to answer the question, “do end users care about decentralisation?”. It seems like the answer is kind of. I’ve always argued it is developer demand that drives decentralisation rather than user demand.

But with BSC you are seeing a bunch of forks and clones of ETH projects which very effectively routes around developer demand. You don’t need many developers if you are EVM compatible. So we have very high user demand for low fees and the market is stepping in and satisfying it.

The real question is whether BSC/Solana have sufficient momentum to maintain a meaningful percentage of DeFi activity once we have multiple ETH scaling solutions in production. Previously I would have said no chance, now I’m not so sure.

One of the main reasons is that I worry there is now a powerful wealth effect going on within BSC and SOL, this is creating highly engaged communities that are very aligned with the success of these networks. I’ve watched as people like @TheCryptoDog peeled off for example.

A lot of people are financially and ideologically aligned with Ethereum, but the rallies in ETH killer tokens lately have eaten into the financial side of that alignment to an extent.

While ETH is up 10x in the last year, for most OG DeFi people ETH is up 100-200x historically. Some of these ETH killers are up that much or more in the last year, and while we may not like price talk in the ETH community ignoring this trend is dangerous.

This is why I think L2 tokens like Matic and others that will launch later this year are critical, we need a way to get new market participants exposure to ETH upside and aligned with the larger ETH ecosystem or we may struggle to retain mindshare.

Yes people can and should buy ETH but at $2500 per ETH there is a big psychological barrier for many people newly entering the space. Heuristics exist even when they fool people into making the wrong decision…

I don’t think we need to be hugely concerned yet, but this trend has certainly progressed much further than I personally expected. Mainly because we are probably a little behind where I hoped we would be heading into the middle of the year in terms of scaling.

The ETH community can and will reel this in but we must not become complacent and assume everyone coming into the space is as aligned with the ideological vision of truly decentralised infrastructure as we are.