Will Solana follow in Ethereum's footsteps by expanding its network? | Featured Thread

Original title: Crucial period for Solana

Original author: DeFi analyst Ignas
Original translation: Ismay, BlockBeats

Editor's note: As the debate over Solana's shift from a monolithic blockchain to modular expansion intensifies, the crypto community faces a narrative battle. This article explores the challenges Solana may encounter, especially the potential fragmentation of liquidity and deterioration of user experience, which are reminiscent of the difficulties Ethereum faces in Layer 2 expansion. Will Solana lose its way as a result, or will it continue to consolidate its position with the help of "network expansion"? At the same time, a new monolithic expansion champion may rise. What does this mean for the entire crypto ecosystem?

Solana is transitioning from a monolithic blockchain expansion to a modular approach, and this narrative is currently under discussion.

Which framework will dominate?

Will the name “Network Extensions” gain recognition in the broader crypto community? Or will a Layer 2 framework similar to Ethereum win the market?

This is important because if Solana abandons the monolithic narrative, it will face an awkward situation similar to Ethereum in this cycle:

During this bull run, $ETH was caught between $BTC and $SOL.

BTC is a “better currency” for less conservative investors and institutions, while SOL is a faster, simpler and cheaper smart contract platform with more potential growth than ETH.

If Solana’s narrative shifts from a monolithic model to using L2 for expansion (similar to Ethereum), then $SOL may become the new $ETH.

We need to see how these network extensions or L2s actually work in the Solana ecosystem.

If Solana faces liquidity fragmentation, deteriorating user experience due to cross-chain bridges, and other negative effects similar to Ethereum L2, then SOL will be in real trouble.

Related reading: "Multicoin talks about Ethereum: What went wrong with ETH? | In-depth interview"

In this case, Ethereum is still a safer long-term asset storage option than Solana: ETH is more decentralized and has no downtime issues.

In addition, if speculators start chasing "network expansion" tokens as a test version of $SOL instead of buying $SOL directly, this may suppress SOL's price growth.

$ETH has suffered a similar beta token chasing effect in this cycle.

I may be wrong, but I believe the situation facing Solana's "PR team" is not optimistic.

Related reading: "Does Solana need L2 and application chains? 》

Austin himself mentioned that network expansion "brings new execution environments, specialized processing, etc.", which sounds more like an L2 to the average retail investor.

But I will still wait and see if this "network expansion" approach leads to liquidity fragmentation, deteriorating user experience, and the growth of the "SOL beta" chasing effect.

Finally, Solana's shift to a modular expansion approach gives the crypto community an opportunity for a new monolithic expansion champion to rise. Will this be a great time for Monad to launch? Or will another Layer 1 blockchain replace Solana and take the monolithic chain's crown?

Exciting! We are witnessing the debate over "truth" in real time. Ultimately, what the community believes to be "truth" may be more important than the fact itself.

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