Is Etherem’s Dominance a Threat to Solana’s Future?

Michael Nadeau, founder of The DeFi Report, noted that while Solana has received an influx of funds from other blockchains, a significant portion of that capital eventually returns to Ethereum.

Via a post on the X platform, he said Solana should attract total locked-in value (TVL) from Ethereum and second-layer networks:

But what really matters for Solana is attracting TVL from Ethereum (and second-layer networks). Why? That’s where most of the value is currently located. Is this change happening? Not quite.

Using data from cryptanalysis platform Artemis, Nadéu noted that Solana has lost about $55 million TVL to platforms like Base, Optimism and Arbitrum since the beginning of the year (YTD).

According to him, Solana has recorded about $2.36 billion of inflow from Ethereum in its year-to-date (YTD) chart. However, over $1 billion of that amount eventually flowed back into Ethereum, accounting for 42% of the total.

He further noted that YTD inflow to Solana from Aetherium was relatively low, accounting for only 2.7% of Solana’s TVL.

As of now, Eterium’s TVL exceeds $50 billion, according to DefiLlama. While Ethereum has experienced net outflows of $6 billion YTD, Nadou noted that 83% of those funds have gone to tier two solutions that are still connected to the ETH ecosystem. These assets are expected to continue to drive value in the core network as most of the migrated funds are still being used within the Ethereum ecosystem.