Congestion and high gas fees: Solana reaches out to Ethereum!

Following on from The Merge and Shanghai, Ethereum is planning further upgrades to make the blockchain more powerful. While waiting for the promised major changes, Solana offers a “plausible” possibility to the Ethereum team. Find out what Anatoly Yakovenko, cofounder of Solana Labs, has to say.

Ethereum mutated into Solana’s layer 2 solution?

Vitalik Buterin has been stirring up trouble in the crypto-sphere of late, announcing that he will stake only a tiny fraction of his ETH. The reason is that the security of Ethereum wallets remains problematic at the moment. Hence the inclusion of this point in the new roadmap for the future development of this blockchain.

Anatoly Yakovenko, aka Toly, recently tweeted this:

Would it be possible for ethereum to be a @solana L2? Probably more likely than you might think at first glance. L2s are bridge protocols that provide one way security. In this setup, holders of solana assets on ethereum would have finality guarantees that they can exit back… https://t.co/XE5ETsxGIW

— toly 🇺🇸 (@aeyakovenko) July 2, 2023

What conditions must be met?

Solana’s co-founder laid out three very distinct conditions in the same tweet:

• submission of all ethereum transactions to Solana;
• submission of an SPV root for the corresponding state;
• the establishment of a bridge timeout to prove the existence of a fault.

Of course, this comes with its drawbacks. And he cited three of them: basic SPV conflicts, invalid base computation (which could be corrected by Neon Labs Org’s EVM) and censoring.

In other words, Solana, with its high throughput and low transaction costs, is in a position to help Ethereum solve its problems of congestion and astronomical gas charges. At peak times, the network can’t keep up. Vitalik Buterin really fears for the future of his blockchain.

Case study

Decrypt uses the Solana-based Ethereum loan of USDC stablecoins as an illustration. In the event that the borrower decides to withdraw his real USDCs on the Solana network, the lender will be given a “junk token” on Ethereum.

“it would be safe to hold Solana assets on Ethereum, it would not be safe to lend them or maintain positions against them. This is due to the risk that an Ethereum fault could separate the Ethereum state on Solana from the Ethereum social consensus fork” Yakovenko points out.

This will lead to problems of inefficiency, as well as constraints on liquidity provision and trading. Coming from a blockchain driven by the ambition to rival Apple, this outstretched hand must be studied closely by Vitalik Buterin’s team.