Ethereum Faces Gathered Competition as Solana Emerges in the Layer-1 Blockchain Race, Nansen CEO Suggests

By: en coinotag|2025/05/03 05:00:04
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The race for dominance among layer-1 blockchains is intensifying, as Ethereum’s once-unchallenged position faces new contenders in the Web3 landscape. As alternative networks rise, the dynamics of decentralized finance (DeFi) are shifting, with the potential to reshape the entire crypto ecosystem. “If you’d asked me 3–4 years ago whether Ethereum would dominate crypto, I’d have said yes,” noted Alex Svanevik, CEO of Nansen. Amidst a shifting crypto landscape, Ethereum’s dominance is faltering while new layer-1 blockchain contenders, led by Solana, emerge in an open competition. Declining Ethereum Dominance in Layer-1 Blockchains Ethereum has long been regarded as the leading layer-1 blockchain network; however, its reign appears to be waning. According to Alex Svanevik, at a recent panel during the LONGITUDE by Cointelegraph event, Ethereum’s **control over the DeFi space** has dropped markedly. With a **total value locked (TVL)** of approximately $52 billion, Ethereum still commands 51% of the market. Yet, just two years ago, it held **96% of the TVL** across all layer-1 blockchains. This dramatic decline illustrates a significant shift in market sentiment and competitive dynamics. The New Contenders: Emerging Layer-1 Networks The emergence of alternative layer-1 solutions has made the blockchain landscape more competitive than ever. Svanevik asserts that smaller chains are growing rapidly, with a select group of five or six L1 networks rising to prominence. **Solana** stands out as a potential frontrunner, recognized for its speed and low transaction fees. With increasing user adoption and on-chain metrics favoring Solana, it raises the question of whether Ethereum can retain its influential position. Solana’s Ascendancy: Metrics and Trends Solana (SOL) has made waves by outperforming Ethereum in several critical metrics, such as active addresses and transaction volume. Svanevik highlighted that, “Solana has overtaken Ethereum on most onchain metrics,” emphasizing its **rapid growth**. Notably, while Ethereum still dominates in TVL, Solana’s lower fees and faster transactions may lure more users and developers. Challenges Ahead for Emerging Chains Despite the promising rise of Solana and other layer-1 networks, **sustainable adoption** remains a challenge. Vardan Khachatryan, chief legal officer of trading platform Fastex, pointed out that hype often drives the popularity of newer chains rather than genuine usage. “Unfortunately, what we see in reality is that chains become popular when they are the hype of that particular bull run,” he explained. The real test for these emerging L1s will be their ability to maintain growth and user engagement beyond trend-driven phases. The Impact of Decentralized Finance (DeFi) on Layer-1 Networks Decentralized finance has been instrumental in shaping the usage and appeal of layer-1 blockchains. As platforms like Solana continue to bloom, the quest for **scalable solutions** that facilitate seamless trading and transaction activities is becoming paramount. Investors are increasingly inclined towards networks that offer both performance and lower costs. This competitive landscape suggests a pivotal moment in the evolution of DeFi services, where the leading networks must respond to market demands effectively. Future Outlook for Layer-1 Networks The road ahead appears to foster intense competition among layer-1 networks, each vying to become the preferred platform for DeFi and broader use cases. As outlined by Svanevik, this holds “**exciting possibilities**” for blockchain technology and application development. Keeping an eye on these trends will be crucial for investors and participants in the crypto space who want to navigate the evolving landscape. Conclusion In conclusion, while Ethereum has been a stalwart in the blockchain arena, its dwindling dominance in light of rising competitors like Solana indicates an **open race** for leadership within the layer-1 sector. The pillars of growth for any emerging network will be sustainable user engagement and adaptability to an ever-evolving market. As this competition unfolds, stakeholders are advised to stay informed about these changes to better grasp the future of **blockchain** technologies.

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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions

The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.


There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."


Question One: Is this encryption the same as Signal's encryption?


No. The difference lies in where the keys are stored.


In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.


X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.


This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.


The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.


The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.


After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."


From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.


In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.



As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."


Issue 2: Does Grok know what you're messaging in private?


Not continuous monitoring, but a clear access point.


For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.


This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.


There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."


Issue 3: Why is there no Android version?


X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.


In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.



WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.


X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.


These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.


Elon Musk's "Super App"


This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.



X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.


Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.


The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.


X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.


The help page sentence has never been just technical instructions.


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