According to a new report, Ethereum [ETH] outperformed other layer-1 altcoins (Alt L1s) like Solana [SOL], Near [NEAR], and Avalanche [AVAX] year-to-date.
In recent months, the cryptocurrency market has lost over $1.4 trillion. Due to failed projects and a lack of liquidity, the industry has declined.
The fall of market leader FTX has also contributed to the overall decline.
The report states that the spread between ETH and Alt L1s began to widen before Ethereum switched to a proof-of-stake (POS) consensus mechanism. Post-Merge, this divergence increased.
Since January, ETH has dropped 67% to $1,194.62, according to CoinMarketCap. SOL has dropped 94%, the most of the Alt L1s listed above.
Solana’s recent ties to disgraced founder Sam Bankman-Fried have also lowered SOL’s value. In the past week, leading NFT projects announced their plans to migrate to Ethereum and Polygon, casting doubt on Solana’s longevity.
NEAR has dropped 90% since the year began. However, several Near Protocol upgrades in the coming year are expected to boost NEAR’s value.
At press time, AVAX traded at $11.24, down 89% since the year began.
Ethereum’s successful migration to a PoS consensus mechanism on 15 September helped ETH outperform other Alt L1s, according to the report.
ETH supply dynamics changed most after Ethereum switched to PoS. After the Merge, ETH’s supply inflated by 3,800, compared to 1.2 million if the network had stayed under PoW consensus. Blockworks Research found,
“In other words, over $1.5B of sell pressure has been removed from the market as a result of the Merge in under just four months,”
