- Some analysts believe Solana’s fundamental metrics have been inflated
- SOL has outperformed ETH on price charts since June, but not this week
There is overwhelming data out there showing Solana [SOL] outperforming Ethereum [ETH] on key fronts, right from revenue to decentralized exchange (DEX) volume. Understandably, this has swayed and reinforced the “SOL as an ETH killer” narrative.
However, there have also been startling disagreements on the SOL vs ETH debate front among industry leaders and market observers this week. One market watcher, Flip Research, summarized these odds with Solana’s data as full of fake and inflated metrics, citing memecoins scams.
“It appears that users, organic fees, and dex volumes are all therefore highly inflated.”
The user also claimed that by extension, SOL is currently overvalued from a fundamental perspective, which was highly overstated.
“SOL is overvalued from a fundamental perspective, and while existing sentiment + momentum may well drive price increases in the short term, the longer term picture is far more uncertain.”
Mixed reactions on SOL’s fundamentals
Flip Research elicited mixed reactions, both in support and against his analysis. One user, Evans, concurred with the analysis and quipped,
“Solana is good tech, but the metrics are not what they seem.”
For his part, Mert Mumtaz, CEO of Solana-focused dev platform Helius Labs, agreed with some of Flip Research’s views and disregarded some of them. Mumtaz agreed with the presence of artificial volume and MEV (maximum extractable value) issues, alongside others on Solana.
However, the exec disregarded the notion that Solana is only good because of memecoins. He claimed,
“Solana isn’t good because of memecoins; Solana is good because it’s where people go to build usable apps in crypto.’
Dan Smith of Blockworks Research also echoed Mumtaz’s sentiment. Smith stated he couldn’t underwrite Solana because of memecoin activity.
On the contrary, Smith claimed that the meme activity tested a viable business model in Solana, one that could drive DeFi and DePIN segments in the future.
“It proved a high volume of low fee transactions is a viable business model.”
SOLETH price performance
Enough of the debate on fundamentals. How are price performances of these two rival digital assets?
The SOLETH ratio tracks SOL’s relative performance in terms of ETH. At press time, the ratio was 0.058, meaning SOL was worth 0.058 ETH. SOL was trading below $180, while ETH exchanged hands below $3300 on the charts.
As of press time, the weekly chart for SOLETH was down 3.6%, meaning SOL underperformed ETH this week.
However, SOL has been outperforming ETH since late June and retested an all-time high. This could, theoretically, set up SOL for a higher rally if breached.
Source: SOLETH, TradingView
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