Solana Foundation President Says Base Network Can’t Compete with SOL

Base Network’s impressive performance in 2024 has raised speculations that it could soon topple Solana. However, Solana Foundation’s president Lily Liu recently stated that the Coinbase layer-2 solution does not pose any threat to the network.

In an interview with the Unchained podcast, Liu argued that Base is not a serious contender for Solana. She said, “I don’t think that Base long-term can compete with Solana. I’m going to be honest.”

Liu pointed out that the main reason Base is considered to be competitive with Solana is because of its fast transaction speed and cheap fees. However, she stated that the Solana network is better placed than Base in terms of decentralization and scalability. 

Corporate L2s Cannibalize Ethereum

The issue of whether L2s are parasitic to the Ethereum Mainnet has been a long-standing debate among crypto experts. Crypto analyst Justin Bons recently opined that L2s are responsible for the Ethereum network’s current struggles as they “steal users and fees” from the network. 

Liu, however, noted that the relationship between Ethereum and corporate L2s such as Base is cannibalistic rather than parasitic.

“I think it’s far worse than being parasitic. I think it’s cannibalistic,” Liu said.

She pointed out that the growing profitability of sequencer fees for Coinbase is causing other corporations to look at L2s “just purely from a PnL perspective.” Thus, rather than scale Ethereum Mainnet, they compete with the network solely because of the incentives. 

According to Liu, while corporate L2s like Base claim to scale Ethereum, they are bridging assets from ETH L1 and natively issuing them on the L2. Liu believes this action does nothing to help the Ethereum ecosystem long-term. 

She added, “At some point, they will build enough scale, because they as well want to have a full spectrum of application verticals from the DeFi stuff, the DePIN stuff, the memecoins, the NFTs, and so forth, that at some point they’re going to think ‘well why shouldn’t we just be a general purpose performant L2 ourselves?”

Base Dominates L2 Performance in 2024

Since its launch in 2023, Base has recorded remarkable growth and recently emerged as the best-performing L2 in 2024. The network’s DEX volume has surged from $180 million in January to over $13 billion in December, only behind Ethereum and Solana. 

Base’s user activity has also continued to expand. Earlier in September, the network recorded over $2 million daily active users.