23 posts tagged with "Scalability"

When Sei launched in 2023, it positioned itself as the fastest Cosmos chain with 20,000 theoretical TPS. Two years later, the network is making its most aggressive bet yet: Giga, an upgrade targeting 200,000 TPS with sub-400ms finality—and a controversial decision to abandon Cosmos entirely in favor of becoming an EVM-only chain.

The timing matters. Monad promises 10,000 TPS with its parallel EVM launching in 2025. MegaETH claims 100,000+ TPS capability. Sei isn't just upgrading—it's racing to define what "fast" means for EVM-compatible blockchains before competitors establish the benchmark.

What Giga Actually Changes​

Sei Giga represents a ground-up rebuild of the network's core architecture, scheduled for Q1 2026. The numbers tell the story of ambition:

Performance Targets:

• 200,000 transactions per second (up from ~5,000-10,000 current)
• Sub-400 millisecond finality (down from ~500ms)
• 40x execution efficiency compared to standard EVM clients

Architectural Changes:

Multi-Proposer Consensus (Autobahn): Traditional single-leader consensus creates bottlenecks. Giga introduces Autobahn, where multiple validators simultaneously propose blocks across different shards. Think of it as parallel highways instead of a single road.

Custom EVM Client: Sei replaced the standard Go-based EVM with a custom client that separates state management from execution. This decoupling enables independent optimization of each component—similar to how databases separate storage engines from query processing.

Parallelized Execution: While other chains execute transactions sequentially, Giga processes non-conflicting transactions simultaneously. The execution engine identifies which transactions touch separate state and runs them in parallel.

Bounded MEV Design: Rather than fighting MEV, Sei implements "bounded" MEV where validators can extract value only within defined parameters, creating predictable transaction ordering.

The Controversial Cosmos Exit: SIP-3​

Perhaps more significant than the performance upgrade is SIP-3—the Sei Improvement Proposal to deprecate CosmWasm and IBC support entirely by mid-2026.

What SIP-3 Proposes:

• Remove CosmWasm (Rust-based smart contracts) runtime
• Deprecate Inter-Blockchain Communication (IBC) protocol support
• Transition Sei to a pure EVM chain
• Require existing CosmWasm dApps to migrate to EVM

The Rationale:

Sei's team argues that maintaining two virtual machines (EVM and CosmWasm) creates engineering overhead that slows development. EVM dominates developer mindshare—over 70% of smart contract developers work primarily with Solidity. By going EVM-only, Sei can:

1. Focus engineering resources on a single execution environment
2. Attract more developers from the larger EVM ecosystem
3. Simplify the codebase and reduce attack surface
4. Maximize parallel execution optimizations

The Criticism:

Not everyone agrees. Cosmos ecosystem participants argue that IBC connectivity provides valuable cross-chain composability. CosmWasm developers face forced migration costs. Some critics suggest Sei is abandoning its differentiated positioning in favor of competing directly with Ethereum L2s.

The counterargument: Sei never achieved significant CosmWasm adoption. Most TVL and activity already runs on EVM. SIP-3 formalizes the reality rather than changing it.

Performance Context: The Parallel EVM Race​

Sei Giga launches into an increasingly competitive parallel EVM landscape:

Chain	Target TPS	Status	Architecture
Sei Giga	200,000	Q1 2026	Multi-proposer consensus
MegaETH	100,000+	Testnet	Real-time processing
Monad	10,000	2025	Parallel EVM
Solana	65,000	Live	Proof of History

How Sei Compares:

vs. Monad: Monad's parallel EVM targets 10,000 TPS with 1-second finality. Sei claims 20x higher throughput with faster finality. However, Monad launches first, and real-world performance often differs from testnet numbers.

vs. MegaETH: MegaETH emphasizes "real-time" blockchain with 100,000+ TPS potential. Both chains target similar performance tiers, but MegaETH maintains EVM equivalence while Sei's custom client may have subtle compatibility differences.

vs. Solana: Solana's 65,000 TPS with 400ms finality represents the current high-performance benchmark. Sei's sub-400ms target would match Solana's speed while offering EVM compatibility that Solana lacks natively.

The honest assessment: All these numbers are theoretical or testnet results. Real-world performance depends on actual usage patterns, network conditions, and economic activity.

Current Ecosystem: TVL and Adoption​

Sei's DeFi ecosystem has grown significantly, though not without volatility:

TVL Trajectory:

• Peak: $688 million (early 2025)
• Current: ~$455-500 million
• YoY growth: Approximately 3x from late 2024

Leading Protocols:

1. Yei Finance: Lending protocol dominating Sei DeFi
2. DragonSwap: Primary DEX with significant volume
3. Silo Finance: Cross-chain lending integration
4. Various NFT/Gaming: Emerging but smaller

User Metrics:

• Daily active addresses: ~50,000-100,000 (variable)
• Transaction volume: Increasing but behind Solana/Base

The ecosystem remains smaller than established L1s but shows consistent growth. The question is whether Giga's performance improvements translate to proportional adoption increases.

Developer Implications​

For developers considering Sei, Giga and SIP-3 create both opportunities and challenges:

Opportunities:

• Standard Solidity development with extreme performance
• Lower gas costs from efficiency improvements
• Early mover advantage in high-performance EVM niche
• Growing ecosystem with less competition than Ethereum mainnet

Challenges:

• Custom EVM client may have subtle compatibility issues
• Smaller user base than established chains
• CosmWasm deprecation timeline creates migration pressure
• Ecosystem tooling still maturing

Migration Path for CosmWasm Developers:

If SIP-3 passes, CosmWasm developers have until mid-2026 to:

1. Port contracts to Solidity/Vyper
2. Migrate to another Cosmos chain
3. Accept deprecation and wind down

Sei has not announced specific migration assistance, though community discussions suggest potential grants or technical support.

Investment Considerations​

Bull Case:

• First-mover in 200,000 TPS EVM space
• Clear technical roadmap with Q1 2026 delivery
• EVM-only focus attracts larger developer pool
• Performance moat against slower competitors

Bear Case:

• Theoretical TPS rarely matches production reality
• Competitors (Monad, MegaETH) launching with momentum
• CosmWasm deprecation alienates existing developers
• TVL growth hasn't matched performance claims

Key Metrics to Watch:

• Testnet TPS and finality in real-world conditions
• Developer activity post-SIP-3 announcement
• TVL trajectory through Giga launch
• Cross-chain bridge volume and integrations

What Happens Next​

Q1 2026: Giga Launch

• Multi-proposer consensus activation
• 200,000 TPS target goes live
• Custom EVM client deployment

Mid-2026: SIP-3 Implementation (if approved)

• CosmWasm deprecation deadline
• IBC support removal
• Full transition to EVM-only

Key Questions:

1. Will real-world TPS match 200,000 target?
2. How many CosmWasm projects migrate vs. leave?
3. Can Sei attract major DeFi protocols from Ethereum?
4. Does performance translate to user adoption?

The Bigger Picture​

Sei's Giga upgrade represents a bet that raw performance will differentiate in an increasingly crowded blockchain landscape. By abandoning Cosmos and going EVM-only, Sei is choosing focus over optionality—betting that EVM dominance makes other execution environments redundant.

Whether this bet pays off depends on execution (pun intended). The blockchain industry is littered with projects that promised revolutionary performance and delivered moderate improvements. Sei's Q1 2026 timeline will provide concrete data.

For developers and investors, Giga creates a clear decision point: believe Sei can deliver on 200,000 TPS and position accordingly, or wait for production proof before committing resources.

The parallel EVM race is officially underway. Sei just announced its entry speed.

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BlockEden.xyz provides RPC infrastructure for high-performance blockchains including Sei Network. As parallel execution chains push throughput boundaries, reliable node infrastructure becomes critical for developers building latency-sensitive applications. Explore our API marketplace for Sei and other blockchain access.

What happens when you take Solana's fastest execution engine and plant it on Ethereum's security foundation? SOON Network answered that question with a number that makes every EVM rollup look antiquated: 80,000 transactions per second. That's 40x faster than any EVM-based Layer 2 and 240x faster than Ethereum mainnet. The Solana Virtual Machine isn't just running on Solana anymore—it's coming for Ethereum's rollup ecosystem.

SOON (Solana Optimistic Network) represents something genuinely novel in blockchain architecture: the first major production rollup bringing Solana's parallel execution capabilities to Ethereum. After raising $22 million through an NFT sale and launching its mainnet, SOON is proving that the SVM vs EVM debate might end with "why not both?"

The Architecture: Decoupled SVM Explained​

SOON's core innovation is what they call the "Decoupled SVM"—a reimagining of Solana's execution environment designed specifically for rollup deployments. Traditional approaches to bringing SVM to other chains involved forking the entire Solana validator, consensus mechanisms and all. SOON took a different path.

What Decoupled SVM Actually Does:

The team separated the Transaction Processing Unit (TPU) from Solana's consensus layer. This allows the TPU to be controlled directly by the rollup node for derivation purposes, without carrying the overhead of Solana's native consensus. Vote transactions—which are necessary for Solana's proof-of-stake but irrelevant for L2s—get eliminated entirely, reducing data availability costs.

The result is a modular architecture with three core components:

1. SOON Mainnet: A general-purpose SVM L2 that settles on Ethereum, serving as the flagship implementation
2. SOON Stack: An open-source rollup framework merging OP Stack with decoupled SVM, enabling SVM-based L2 deployment on any L1
3. InterSOON: A cross-chain messaging protocol for seamless interoperability between SOON and other blockchain networks

This isn't just theoretical. SOON's public mainnet launched with 20+ ecosystem projects deployed, including native bridges for Ethereum and cross-chain connectivity to Solana and TON.

Firedancer Integration: The Performance Breakthrough​

The 80,000 TPS figure isn't aspirational—it's tested. SOON achieved this milestone through early integration of Firedancer, Jump Trading's ground-up reimplementation of the Solana validator client.

Firedancer's Impact on SOON:

• Signature verification speeds increased 12x
• Account update throughput expanded from 15,000/second to 220,000/second
• Network bandwidth requirements reduced by 83%

According to SOON founder Joanna Zeng, "even with like the basic hardware, we were able to test out to like 80K TPS, which is already about 40 times any EVM L2 out there."

The timing matters. SOON implemented Firedancer ahead of its widespread deployment on Solana mainnet, positioning itself as an early adopter of the most significant performance upgrade in Solana's history. Once Firedancer stabilizes fully, SOON plans to integrate it across all SOON Stack deployments.

What This Means for Ethereum:

With Firedancer's release, SOON projects a 600,000 TPS capability for Ethereum—300x the throughput of current EVM rollups. The parallel execution model that makes Solana fast (Sealevel runtime) now operates within Ethereum's security perimeter.

The SVM Rollup Landscape: SOON vs Eclipse vs Neon​

SOON isn't alone in the SVM-on-Ethereum space. Understanding the competitive landscape reveals different approaches to the same fundamental insight: SVM's parallel execution outperforms EVM's sequential model.

Aspect	SOON	Eclipse	Neon
Architecture	OP Stack + Decoupled SVM	SVM + Celestia DA + RISC Zero proofs	EVM-to-SVM translation layer
Focus	Multi-L1 deployment via SOON Stack	Ethereum L2 with Celestia DA	EVM dApp compatibility on SVM chains
Performance	80,000 TPS (Firedancer)	~2,400 TPS	Native Solana speeds
Funding	$22M (NFT sale)	$65M	Production since 2023
Token Model	Fair launch, no VC	$ES as gas token	NEON token

Eclipse launched its public mainnet in November 2024 with $65 million in VC backing. It uses Ethereum for settlement, SVM for execution, Celestia for data availability, and RISC Zero for fraud proofs. Transaction costs run as low as $0.0002.

Neon EVM took a different approach—rather than building an L2, Neon provides an EVM compatibility layer for SVM chains. Eclipse integrated Neon Stack to enable EVM dApps (written in Solidity or Vyper) to run on SVM infrastructure, breaking the EVM-SVM compatibility barrier.

SOON's Differentiation:

SOON emphasizes its fair launch token model (no VC involvement in initial distribution) and its SOON Stack as a framework for deploying SVM L2s on any L1—not just Ethereum. This positions SOON as infrastructure for the broader multi-chain future rather than a single Ethereum L2 play.

Tokenomics and Community Distribution​

SOON's token distribution reflects its community-first positioning:

Allocation	Percentage	Amount
Community	51%	510 million
Ecosystem	25%	250 million
Team/Co-builders	10%	100 million
Foundation/Treasury	6%	60 million

The total supply is 1 billion $SOON tokens. Community allocation includes airdrops for early adopters and liquidity provision for exchanges. The ecosystem portion funds grants and performance-based incentives for builders.

$SOON serves multiple functions within the ecosystem:

• Governance: Token holders vote on protocol upgrades, treasury management, and ecosystem development
• Utility: Powers all activities across SOON ecosystem dApps
• Incentives: Rewards builders and ecosystem contributors

The absence of VC token allocations at launch distinguishes SOON from most L2 projects, though the long-term implications of this model remain to be seen.

The Multi-Chain Strategy: Beyond Ethereum​

SOON's ambition extends beyond being "another Ethereum L2." The SOON Stack is designed to deploy SVM-based rollups on any supporting Layer 1, creating what the team calls the "Super Adoption Stack."

Current Deployments:

• SOON ETH Mainnet (Ethereum)
• svmBNB Mainnet (BNB Chain)
• InterSOON bridges to Solana and TON

Future Roadmap:

SOON has announced plans to incorporate Zero Knowledge Proofs to address the optimistic rollup challenge period. Currently, like other optimistic rollups, SOON requires a one-week challenge period for fraud proofs. ZK proofs would enable instant verification, eliminating this delay.

This multi-chain approach bets on a future where SVM execution becomes a commodity deployable anywhere—Ethereum, BNB Chain, or chains that don't exist yet.

Why SVM on Ethereum Makes Sense​

The fundamental case for SVM rollups rests on a simple observation: Solana's parallel execution model (Sealevel) processes transactions simultaneously across multiple cores, while EVM processes them sequentially. When you're running thousands of independent transactions, parallelism wins.

The Numbers:

• Daily Solana transactions: 200 million (2024), projected 4+ billion by 2026
• Current EVM L2 throughput: ~2,000 TPS maximum
• SOON with Firedancer: 80,000 TPS tested

But Ethereum offers something Solana doesn't: established security guarantees and the largest DeFi ecosystem. SOON isn't trying to replace either chain—it's combining Ethereum's security with Solana's execution.

For DeFi applications requiring high transaction throughput (perpetuals, options, high-frequency trading), the performance gap matters. A DEX on SOON can process 40x more trades than the same DEX on an EVM rollup, at similar or lower costs.

What Could Go Wrong​

Complexity Risk: The Decoupled SVM introduces new attack surfaces. Separating consensus from execution requires careful security engineering. Any bugs in the decoupling layer could have consequences different from standard Solana or Ethereum vulnerabilities.

Ecosystem Fragmentation: Developers must choose between EVM tooling (more mature, larger community) and SVM tooling (faster execution, smaller ecosystem). SOON bets that performance advantages will drive migration, but developer inertia is real.

Firedancer Dependencies: SOON's roadmap depends on Firedancer stability. While early integration provides competitive advantage, it also means bearing the risk of a new, less battle-tested client implementation.

Competition: Eclipse has more funding and VC backing. Other SVM projects (Sonic SVM, various Solana L2s) compete for the same developer attention. The SVM rollup space may face similar consolidation pressures as EVM L2s.

The Bigger Picture: Execution Layer Convergence​

SOON represents a broader trend in blockchain architecture: execution environments becoming portable across settlement layers. The EVM dominated smart contract development for years, but SVM's parallel execution demonstrates that alternative architectures offer genuine performance advantages.

If SVM rollups prove successful on Ethereum, the implications extend beyond any single project:

1. Developers gain options: Choose EVM for compatibility or SVM for performance, deploying on the same Ethereum security layer
2. Performance ceiling rises: 80,000 TPS today, potentially 600,000+ TPS with full Firedancer integration
3. Chain wars become less relevant: When execution engines are portable, the question shifts from "which chain?" to "which execution environment for this use case?"

SOON isn't just building a faster L2—it's betting that blockchain's future involves mixing and matching execution environments with settlement layers. Ethereum security with Solana speed isn't a contradiction anymore; it's an architecture.

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BlockEden.xyz provides high-performance RPC infrastructure for developers building on Solana, Ethereum, and emerging L2 ecosystems. As SVM rollups expand blockchain's execution capabilities, reliable node infrastructure becomes critical for applications requiring consistent performance. Explore our API marketplace for multi-chain development.

Ethereum just completed the most aggressive data throughput expansion in its history — and most users have no idea it happened.

Between December 2025 and January 2026, three coordinated hard forks quietly tripled Ethereum's blob capacity while slashing Layer-2 transaction fees by up to 60%. The upgrade, codenamed Fusaka (a portmanteau of "Fulu" and "Osaka"), represents a fundamental shift in how Ethereum handles data availability — and it's only the beginning.

From Bottleneck to Breakthrough: The Blob Revolution​

Before Fusaka, every Ethereum validator had to download and store 100% of blob data to verify its availability. This created an obvious scalability ceiling: more data meant more bandwidth requirements for every node, threatening the network's decentralization.

Fusaka's headline feature, PeerDAS (Peer Data Availability Sampling), fundamentally restructures this requirement. Instead of downloading complete blobs, validators now sample just 8 of 128 columns — roughly 6.25% of the total data — using cryptographic techniques to verify the rest is available.

The technical magic happens through Reed-Solomon erasure coding: each blob is mathematically extended and split into 128 columns distributed across specialized subnets. As long as 50% of columns remain accessible, the entire original blob can be reconstructed. This seemingly simple optimization unlocks an 8x theoretical increase in blob throughput without forcing nodes to scale their hardware.

The BPO Fork Sequence: A Masterclass in Careful Scaling​

Rather than shipping everything at once, Ethereum's core developers executed a precise three-part rollout:

Fork	Date	Target Blobs	Max Blobs
Fusaka	December 3, 2025	6	9
BPO-1	December 17, 2025	10	15
BPO-2	January 7, 2026	14	21

This Blob-Parameter-Only (BPO) approach allowed developers to collect real-world data between each increment, ensuring network stability before pushing further. The result? Blob capacity has already more than tripled from pre-Fusaka levels, with core developers now planning BPO-3 and BPO-4 to reach 128 blobs per block by mid-2026.

Layer-2 Economics: The Numbers That Matter​

The impact on L2 users is immediate and measurable. Before Fusaka, average L2 transaction costs ranged from $0.50 to $3.00. Post-upgrade:

• Arbitrum and Optimism: Users report transaction costs of $0.005 to $0.02
• Average Ethereum gas fees: Dropped to approximately $0.01 per transaction — down from $5+ during peak 2024 periods
• L1 batch submission costs: Reduced by 40% for L2 sequencers

The ecosystem-wide statistics tell a compelling story:

• L2 networks now process approximately 2 million daily transactions — double Ethereum mainnet volume
• Combined L2 throughput has exceeded 5,600 TPS for the first time
• The L2 ecosystem handles over 58.5% of all Ethereum transactions
• Total Value Secured across L2s has reached approximately $39.89 billion

The EOF Saga: Pragmatism Over Perfection​

One notable absence from Fusaka tells its own story. The EVM Object Format (EOF), a sweeping 12-EIP overhaul of smart contract bytecode structure, was removed from the upgrade after months of heated debate.

EOF would have restructured how smart contracts separate code, data, and metadata — promising better security validation and lower deployment costs. Supporters argued it represented the future of EVM development. Critics called it over-engineered complexity.

In the end, pragmatism won. As core developer Marius van der Wijden noted: "We don't agree, and we're not coming to an agreement about EOF anymore, and so it has to go out."

By stripping EOF and focusing exclusively on PeerDAS, Ethereum shipped something that worked rather than something that might have been better but remained contentious. The lesson: sometimes the fastest path to progress is accepting that not everyone will agree.

Network Activity Responds​

The market has noticed. On January 16, 2026, Ethereum L2 networks recorded 2.88 million daily transactions — a new peak driven by gas fee efficiency. The Arbitrum network, specifically, has seen its sequencer throughput reach 8,000 TPS under stress tests following its "Dia" upgrade optimized for Fusaka compatibility.

Base has emerged as the clear winner in the post-Fusaka landscape, capturing the majority of new liquidity while many competing L2s have seen their TVLs stagnate. The combination of Coinbase's distribution advantage and sub-penny transaction costs has created a virtuous cycle that other rollups struggle to match.

The Road to 10,000 TPS​

Fusaka is explicitly positioned as a stepping stone, not a destination. The current roadmap includes:

June 2026: Blob count expansion to 48 through continued BPO forks

Late 2026 (Glamsterdam): The next major named upgrade, targeting:

• Gas limit increases to 200 million
• "Perfect parallel processing" for transaction execution
• Further PeerDAS optimizations

Beyond: The "Hegota" fork slot, expected to push scaling even further

With these improvements, L2s like Base project they can reach 10,000-20,000 TPS, with the entire combined L2 ecosystem scaling from current levels to over 24,000 TPS.

What This Means for Builders​

For developers and infrastructure providers, the implications are substantial:

Application Layer: Sub-penny transaction costs finally make microtransactions viable. Gaming, social applications, and IoT use cases that were economically impossible at $1+ per transaction now have breathing room.

Infrastructure: The reduced bandwidth requirements for node operators should help maintain decentralization as throughput scales. Running a validator no longer requires enterprise-grade connectivity.

Business Models: DeFi protocols can experiment with higher-frequency trading strategies. NFT marketplaces can batch operations without prohibitive gas costs. Subscription models and per-use pricing become economically feasible on-chain.

The Competitive Landscape Shifts​

With L2 fees now competitive with Solana (often cited at $0.00025 per transaction), the narrative that "Ethereum is too expensive" requires updating. The more relevant questions become:

• Can Ethereum's fragmented L2 ecosystem match Solana's unified UX?
• Will bridges and interoperability improve fast enough to prevent liquidity balkanization?
• Does the L2 abstraction layer add complexity that drives users elsewhere?

These are UX and adoption questions, not technical limitations. Fusaka has demonstrated that Ethereum can scale — the remaining challenges are about how that capacity translates to user experience.

Conclusion: The Quiet Revolution​

Fusaka didn't make headlines the way The Merge did. There were no dramatic countdowns or environmental impact debates. Instead, three coordinated hard forks over six weeks quietly transformed Ethereum's economics.

For users, the difference is tangible: transactions that cost dollars now cost pennies. For developers, the playground has expanded dramatically. For the broader industry, the question of whether Ethereum can scale has been answered — at least for the current generation of demand.

The next test comes later in 2026, when Glamsterdam attempts to push these numbers even higher. But for now, Fusaka represents exactly what successful blockchain upgrades should look like: incremental, data-driven, and focused on real-world impact rather than theoretical perfection.

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BlockEden.xyz provides enterprise-grade RPC nodes and indexing infrastructure for Ethereum and all major L2 networks. As the ecosystem scales, we scale with it. Explore our API marketplace to build on infrastructure designed for the multi-rollup future.

The Ethereum Layer 2 ecosystem has reached an inflection point. After years of explosive growth that saw dozens of rollups launch with billion-dollar valuations and aggressive airdrop campaigns, 2026 is shaping up to be the year of reckoning. The data tells an uncomfortable story: three networks—Base, Arbitrum, and Optimism—now process nearly 90% of all L2 transactions, while the long tail of competing rollups faces an existential crisis.

This isn't speculation. It's the logical conclusion of market dynamics that have been building throughout 2025, accelerating into a consolidation phase that will reshape Ethereum's scaling layer. For developers, investors, and users, understanding this shift is essential for navigating the year ahead.

The Numbers That Matter​

Layer 2 Total Value Locked has grown from under $4 billion in 2023 to approximately $47 billion by late 2025—a remarkable achievement for Ethereum's scaling thesis. But that growth has been remarkably concentrated.

Base alone now accounts for over 60% of all L2 transactions and approximately 46.6% of L2 DeFi TVL. Arbitrum holds roughly 31% of DeFi TVL with $16-19 billion in total value secured. Optimism, through its OP Stack ecosystem (which powers Base), influences approximately 62% of all Layer 2 transactions.

Together, these three ecosystems command over 80% of meaningful L2 activity. The remaining 20% is fragmented across dozens of chains, many of which have seen usage collapse after their initial airdrop farming cycles concluded.

21Shares, the crypto asset manager, projects a "leaner, more resilient" set of networks will define Ethereum's scaling layer by end of 2026. Translation: many existing L2s will become zombie chains—technically operational but economically irrelevant.

The Zombie Chain Phenomenon​

The pattern has become predictable. A new L2 launches with venture backing, promising superior technology or unique value propositions. An incentive program attracts mercenary capital chasing points and potential airdrops. Usage metrics spike dramatically. A Token Generation Event (TGE) occurs. Within weeks, liquidity and users migrate elsewhere, leaving behind a ghost town.

This isn't a failure of technology—most of these rollups work exactly as designed. It's a failure of distribution and sustainable economics. Building a rollup has become commoditized; acquiring and retaining users has not.

The data shows that 2025 was "the year the Layer 2 narrative bifurcated." Most new launches became ghost towns shortly after airdrop farming cycles, while only a handful of L2s escaped this phenomenon. The mercenary nature of on-chain participation means that absent genuine product differentiation or locked-in user bases, capital flows to wherever the next incentive opportunity exists.

Base: The Distribution Moat​

Base's dominance illustrates why distribution trumps technology in the current L2 landscape. Coinbase's L2 finished 2025 as the top rollup by revenue, earning $82.6 million while maintaining $4.3 billion in DeFi TVL. Applications built on Base generated an additional $369.9 million in revenue.

The numbers get more impressive when you examine sequencer economics. Base averages $185,291 in daily sequencer revenue, with priority fees alone contributing $156,138 daily—approximately 86% of total revenue. Transactions in the top block positions contribute 30-45% of daily revenue, highlighting the value of ordering rights even in a post-Dencun environment.

What makes Base different isn't superior rollup technology—it runs on the same OP Stack that powers Optimism and dozens of other chains. The difference is Coinbase's 9.3 million monthly active trading users, providing direct distribution to an already-onboarded user base. This is the moat that technology alone cannot replicate.

Base was the only L2 that turned a profit in 2025, earning approximately $55 million after accounting for L1 data costs and revenue sharing with the Optimism Collective. For comparison, most other L2s operated at losses while hoping token appreciation would compensate for negative unit economics.

Arbitrum: The DeFi Fortress​

While Base dominates transaction volume and retail activity, Arbitrum maintains its position as the institutional and DeFi heavyweight. With $16-19 billion in total value secured—representing roughly 41% of the entire L2 market—Arbitrum hosts the deepest liquidity pools and most sophisticated DeFi protocols.

Arbitrum's strength lies in its maturity and composability. Major protocols like GMX, Aave, and Uniswap have established significant deployments, creating network effects that attract additional projects. The chain's governance through the ARB token, while imperfect, has created a stakeholder ecosystem invested in long-term success.

Recent data shows $40.52 million in net inflows to Arbitrum, suggesting continued institutional confidence despite the competitive pressure from Base. However, Arbitrum's TVL has remained largely flat year-over-year, edging down slightly from approximately $2.9 billion to $2.8 billion in DeFi TVL—a sign that growth is increasingly zero-sum against Base.

The Superchain Strategy​

Optimism's approach to L2 competition has been strategic rather than direct. Instead of fighting Base for market share, Optimism positioned itself as infrastructure through the OP Stack and Superchain model.

The numbers validate this bet: the OP Stack now powers roughly 62% of all Layer 2 transactions. Within the Superchain ecosystem, there are currently 30 Layer 2s, including enterprise deployments like Kraken's Ink, Sony's Soneium, Mode, and World (formerly Worldcoin).

Base contributes 2.5% of its sequencer revenue or 15% of net profits to the Optimism Collective in exchange for 118 million OP tokens vesting over several years. This creates a symbiotic relationship where Base's success directly benefits Optimism's treasury and governance token.

The Superchain model represents the emergence of the "enterprise rollup"—a phenomenon where major institutions launch or adopt L2 infrastructure rather than building on existing public chains. Kraken, Uniswap (Unichain), Sony, and Robinhood have all moved in this direction, betting on branded execution environments while sharing security and interoperability through the OP Stack.

The Coming Consolidation​

What does this mean for the dozens of L2s outside the top three? Several outcomes are likely:

Acquisition or Merger: Well-funded L2s with unique technology or niche user bases may be absorbed into larger ecosystems. Expect Superchain and Arbitrum Orbit to compete for promising projects that can't sustain independent operations.

Pivot to App-Specific Chains: Some general-purpose L2s may narrow their focus to specific verticals (gaming, DeFi, social) where they can maintain defensible positions. This follows the broader trend of application-specific sequencing.

Graceful Deprecation: The most likely outcome for many chains is a slow fade—reduced development activity, migrated liquidity, and eventual effective abandonment while technically remaining operational.

ZK Breakthrough: ZK rollups, currently holding approximately $1.3 billion in TVL across a dozen active projects, represent a wildcard. If ZK proving costs continue declining and the technology matures, ZK-based L2s could capture share from optimistic rollups—though they face the same distribution challenges.

The Decentralization Question​

A uncomfortable truth underlies this consolidation: most L2s remain far more centralized than they appear. Despite progress in decentralization efforts, many networks continue to rely on trusted operators, upgrade keys, and closed infrastructure.

As one analyst noted, "2025 has shown that decentralization is still treated as a long-term goal rather than an immediate priority." This creates systemic risk if dominant L2s face regulatory pressure or operational failures. The concentration of 80%+ of activity in three ecosystems, all of which have meaningful centralization vectors, should concern anyone building mission-critical applications.

What Comes Next​

For developers, the implications are clear: build where the users are. Unless you have a compelling reason to deploy on a niche L2, Base, Arbitrum, and Optimism offer the best combination of liquidity, tooling, and user access. The days of deploying everywhere and hoping for the best are over.

For investors, L2 token valuations need recalibration. Cash flow will increasingly matter—networks that can demonstrate sustainable sequencer revenue and profitable operations will command premiums over those relying on token inflation and speculation. Revenue-sharing models, sequencer profit distribution, and yield tied to actual network usage will define which L2 tokens have long-term value.

For the industry, the L2 shakeout represents maturation, not failure. Ethereum's scaling thesis was never about having hundreds of competing rollups—it was about achieving scale while preserving decentralization and security guarantees. A consolidated landscape with 5-10 meaningful L2s, each processing millions of transactions daily at sub-cent fees, accomplishes that goal more effectively than a fragmented ecosystem of zombie chains.

The great Layer 2 shakeout of 2026 will be uncomfortable for projects caught on the wrong side of the consolidation curve. But for Ethereum as a platform, the emergence of clear winners may be exactly what's needed to move past infrastructure debates and toward the application layer innovation that actually matters.

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BlockEden.xyz provides infrastructure for developers building across the Layer 2 ecosystem. As the rollup landscape consolidates, reliable multi-chain API access becomes essential for applications that need to serve users wherever they are. Explore our API marketplace for Ethereum, Arbitrum, Base, Optimism, and emerging L2 networks.

Can an EVM-compatible blockchain actually deliver 10,000 transactions per second while keeping gas fees in the fractions of a cent? Two months after its mainnet launch, Monad is making a compelling case that it can—and the DeFi ecosystem is paying attention.

When Jump Trading veterans Keone Hon and James Hunsaker set out to build Monad in early 2023, they faced a fundamental question that has haunted Ethereum developers for years: why must the world's most developer-friendly blockchain also be one of its slowest? Their answer—a ground-up reimagining of how EVM blockchains execute transactions—has attracted $244 million in funding, a $3 billion valuation, and now $255 million in total value locked within weeks of launch.

The Problem Monad Set Out to Solve​

Ethereum processes roughly 15-50 transactions per second. During periods of high demand, gas fees can spike to $50 or more for a simple token swap. This creates an uncomfortable trade-off: developers who want the largest ecosystem and best tooling must accept poor performance, while those seeking speed must abandon EVM compatibility entirely.

Solana took the latter path, building a custom virtual machine that achieves 1,000-1,500 TPS but requires developers to rewrite applications in Rust and adapt to an entirely different account model. This has led to ecosystem fragmentation—tools, libraries, and infrastructure that work on Ethereum don't work on Solana, and vice versa.

Monad's thesis is that this trade-off is unnecessary. The bottleneck isn't the EVM itself but how transactions are processed. By fundamentally rethinking execution while maintaining bytecode-level EVM compatibility, Monad achieves Solana-like performance without forcing developers to leave the Ethereum ecosystem.

Five Technical Innovations That Make 10,000 TPS Possible​

Monad's performance comes from five interconnected architectural innovations, each addressing a different bottleneck in traditional blockchain design.

MonadBFT: Solving the Tail-Forking Problem​

Traditional Byzantine Fault Tolerance (BFT) consensus algorithms like Tendermint require three rounds of communication before finalizing a block. MonadBFT, based on an optimized derivative of HotStuff, reduces this to two phases while achieving linear communication complexity.

More importantly, MonadBFT solves the "tail-forking problem" that plagues other BFT implementations. In standard protocols, a malicious leader can propose conflicting blocks to different validators, causing confusion and delays. MonadBFT's quadratic communication during timeout scenarios prevents this attack vector while maintaining sub-second finality under normal conditions.

The result: 400ms block times and approximately 800ms to finality—faster than blinking.

Asynchronous Execution: Decoupling Consensus from State Updates​

In Ethereum, validators must execute transactions before reaching consensus. This creates a bottleneck: if transaction execution takes too long, the entire network slows down waiting for state updates.

Monad flips this model. Validators first agree on transaction ordering through MonadBFT, then execute transactions asynchronously in a separate pipeline. This means slow, complex smart contract operations can't delay block production. The network maintains consistent 400ms block times regardless of transaction complexity.

Optimistic Parallel Execution: Utilizing All CPU Cores​

Here's the core insight that makes Monad's speed possible: most transactions in a block don't actually conflict with each other.

When you swap tokens on Uniswap and I transfer an NFT, our transactions touch completely different state. There's no reason they can't execute simultaneously. Traditional EVMs process them sequentially anyway, leaving most CPU cores idle.

Monad's optimistic parallel execution runs independent transactions simultaneously across all available cores. The system operates under an "optimistic" assumption that most transactions won't conflict. When they do, it detects the conflict, re-executes the affected transactions, and applies results in the original order. This preserves Ethereum's strict serial semantics while dramatically improving throughput.

MonadDB: A Database Built for Blockchain​

State access is often the true bottleneck in blockchain execution. Every time a smart contract reads or writes data, it triggers database operations that can take milliseconds—an eternity when processing thousands of transactions per second.

MonadDB is a custom-built database written in C++ and Rust, optimized specifically for EVM state access patterns. It minimizes RAM pressure while maximizing SSD throughput, enabling the rapid state reads and writes that parallel execution requires.

RaptorCast: High-Speed Block Propagation​

None of this matters if blocks can't propagate quickly across the network. RaptorCast is Monad's networking layer, designed to broadcast new blocks to validators rapidly without requiring servers to be colocated in the same data centers. This enables decentralization without sacrificing speed.

The Mainnet Launch: From Hype to Reality​

Monad launched its mainnet on November 24, 2025, nearly three years after the team's initial seed round. The launch included a significant airdrop, distributing 15.75% of MON's 100 billion token supply to early testnet participants and liquidity providers.

The initial response was overwhelming—BERA briefly surged to $14.83 before settling around $8. More importantly for the ecosystem, major DeFi protocols deployed within days:

• Uniswap v4 leads with $28 million TVL
• Curve and Morpho brought established lending infrastructure
• Agora's AUSD stablecoin captured $144 million in deposits
• Upshift accumulated $476 million in deposits for DeFi yield strategies

By January 2026, the ecosystem reached $255 million in TVL with $397 million in stablecoins—impressive growth for a two-month-old network.

The Uniswap Dominance Problem​

Here's the uncomfortable truth about Monad's early ecosystem: roughly 90% of TVL sits in established protocols that simply deployed existing code on Monad, not native applications built specifically for the network.

This isn't necessarily bad—EVM compatibility is working exactly as designed. Developers can deploy existing Ethereum smart contracts without modification. But it raises questions about whether Monad will develop a differentiated ecosystem or simply become another place to use Uniswap.

Native Monad applications are emerging, though slowly:

• Kuru: A hybrid order book-AMM DEX designed to leverage Monad's speed for market makers
• FastLane: The primary liquid staking token (LST) protocol on Monad
• Pinot Finance: An alternative DEX aiming to differentiate from Uniswap
• Neverland: Among the few Monad-native applications in the top TVL rankings

The 304 protocols listed in Monad's ecosystem directory span DeFi, AI, and prediction markets, with 78 unique to Monad. Whether these native applications can gain meaningful market share against established protocols remains the key question for 2026.

Monad vs. The Competition: Where Does It Fit?​

The high-performance Layer-1 space is increasingly crowded. How does Monad compare?

Feature	Monad	Solana	Ethereum
TPS	~10,000	~1,000-1,500	~15-50
Finality	~0.8-1 second	~400ms	~12 minutes
EVM Compatible	Full bytecode	No	Native
Smart Contract Language	Solidity	Rust/C	Solidity
Validator Hardware	Consumer-grade	Data-center	Moderate
TVL (Jan 2026)	$255M	$8.5B	$60B+

Against Solana: Monad wins on EVM compatibility—developers don't need to rewrite applications or learn new languages. Solana wins on ecosystem maturity, deeper liquidity, and battle-tested infrastructure after years of operation (and outages). Monad's deterministic parallel execution also provides more predictability than Solana's asynchronous runtime, which has occasionally struggled with congestion.

Against Ethereum L2s: Base, Arbitrum, and Optimism offer EVM compatibility with Ethereum's security guarantees through fraud proofs or validity proofs. Monad operates as an independent L1, meaning it sacrifices Ethereum's security inheritance for potentially higher throughput. The trade-off depends on whether users prioritize maximum security or maximum speed.

Against MegaETH: Both claim 10,000+ TPS with sub-second finality. MegaETH launched in January 2026 with Vitalik Buterin's backing and targets 100,000 TPS with 10ms block times—even more aggressive than Monad. The competition between these high-performance EVM chains will likely define which approach gains market dominance.

The Jump Trading DNA​

Monad's founding team background explains much about its design philosophy. Keone Hon spent eight years at Jump Trading leading high-frequency trading teams before transitioning to Jump Crypto. James Hunsaker worked alongside him, building systems that process millions of transactions per second with microsecond latency.

High-frequency trading infrastructure demands exactly what Monad delivers: predictable latency, parallel processing, and the ability to handle massive throughput without degradation. The team didn't just imagine what a high-performance blockchain should look like—they spent nearly a decade building analogous systems in traditional finance.

This background also attracted major backing: Paradigm led the $225 million Series A at a $3 billion valuation, with participation from Dragonfly Capital, Electric Capital, Greenoaks, Coinbase Ventures, and angel investors including Naval Ravikant.

What 2026 Holds for Monad​

The roadmap for the coming year focuses on three areas:

Q1 2026: Staking Program Launch Validator incentives and slashing mechanisms will go live, transitioning Monad toward fuller decentralization. The current validator set remains relatively small compared to Ethereum's million-plus validators.

H1 2026: Cross-Chain Bridge Upgrades Enhanced interoperability with Ethereum and Solana through partnerships with Axelar, Hyperlane, LayerZero, and deBridge. Seamless bridging will be crucial for attracting liquidity from established ecosystems.

Ongoing: Native Application Development The Mach: Monad Accelerator and Monad Madness programs continue supporting builders creating Monad-native applications. Whether the ecosystem develops distinctive protocols or remains dominated by Uniswap and other multi-chain deployments will likely determine Monad's long-term differentiation.

The Bottom Line​

Monad represents the clearest test yet of whether EVM-compatible blockchains can match purpose-built alternatives like Solana on performance. Two months post-launch, the initial evidence is promising: 10,000 TPS is achievable, major protocols have deployed, and $255 million in value has migrated to the network.

But significant questions remain. Can native applications gain traction against established multi-chain protocols? Will the ecosystem develop distinctive use cases that leverage Monad's unique capabilities? And as MegaETH and other high-performance EVM chains launch, will Monad's first-mover advantage in this specific niche matter?

For Ethereum developers frustrated by gas fees and slow confirmation times, Monad offers an intriguing proposition: keep your existing code, tools, and mental models while gaining 200x better performance. For the broader crypto ecosystem, it's a high-stakes experiment in whether technical excellence alone can build sustainable network effects.

The Jump Trading veterans behind Monad spent years building systems where milliseconds matter. Now they're applying that same obsession to blockchain—and the early results suggest they might just be onto something.

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BlockEden.xyz provides enterprise-grade API infrastructure for high-performance blockchains including Ethereum, Solana, and emerging Layer-1 networks. As the blockchain landscape evolves with new high-throughput chains like Monad, reliable RPC endpoints become essential for developers building applications that demand consistent, low-latency performance. Explore our API marketplace to access the infrastructure your applications need.

Blast's total value locked collapsed 97%—from $2.2 billion to $67 million. Kinto shut down entirely. Loopring closed its wallet service. And that's just the beginning. As 2026 unfolds, Ethereum's Layer 2 ecosystem is witnessing a mass extinction event that's reshaping the entire blockchain scaling landscape.

While more than 50 Layer 2 networks compete for attention, 21Shares' latest State of Crypto report delivers a sobering verdict: most won't survive past 2026. Three networks—Base, Arbitrum, and Optimism—now process nearly 90% of all L2 transactions, with Base alone commanding over 60% market share. The rest? They're becoming "zombie chains," ghost networks with usage down 61% since mid-2025, drained of liquidity, users, and any meaningful future.

The Three Horsemen of L2 Dominance​

The consolidation numbers tell a stark story. Base captured 62% of total L2 revenue year-to-date in 2025, generating $75.4 million of the ecosystem's $120.7 million. Arbitrum and Optimism follow, but the gap is widening rather than closing.

What separates the winners from the walking dead?

Distribution advantage: Base's primary weapon is direct access to Coinbase's 9.3 million monthly active users—a built-in distribution channel that no other L2 can replicate. When Coinbase users applied for $866.3 million in loans through Morpho, 90% of that activity happened on Base. Morpho's TVL on Base exploded 1,906% year-to-date, from $48.2 million to $966.4 million.

Transaction volume: Base handled nearly 40 million transactions in the last 30 days. Compare that to Arbitrum's 6.21 million and Polygon's 29.3 million. Base boasts 15 million unique active wallets versus Arbitrum's 1.12 million and Polygon's 3.69 million.

Profitability: Here's the killer metric—Base was the only L2 that turned a profit in 2025, earning approximately $55 million. Every other rollup operated at a loss after Ethereum's Dencun upgrade slashed data fees by 90%, triggering aggressive fee wars that most networks couldn't win.

The Dencun Aftermath: When Lower Fees Became a Death Sentence​

Ethereum's Dencun upgrade was supposed to be a gift to Layer 2 networks. By reducing data posting costs by roughly 90%, it would make rollups cheaper to operate and more attractive to users. Instead, it triggered a race to the bottom that exposed the fundamental weakness of undifferentiated L2s.

When everyone can offer cheap transactions, nobody has pricing power. The result was a fee war that pushed most rollups into loss-making territory. Without a unique value proposition—whether that's a built-in user base like Base, a mature DeFi ecosystem like Arbitrum, or a network of enterprise chains like Optimism's Superchain—there's no sustainable path forward.

The economic reality is brutal: competitive pressure intensified to the point where only networks with massive scale or strategic backing can survive. That leaves dozens of L2s running on fumes, hoping for a turnaround that likely isn't coming.

Anatomy of a Zombie Chain: The Blast Case Study​

Blast's trajectory offers a masterclass in how quickly an L2 can go from hype to hospice. At its peak, Blast commanded $2.2 billion in TVL and 77,000 daily active users. Today? TVL sits at $55-67 million—a 97% collapse—with just 3,500 daily active users.

The warning signs were there for anyone watching:

Airdrop-driven growth: Like many L2s, Blast's initial traction came from points-fueled speculation rather than organic demand. Users piled in to farm the airdrop, then fled the moment tokens hit wallets.

Disappointing token launch: The BLAST token airdrop failed to retain users, triggering an immediate exodus to rivals like Base and Arbitrum with established ecosystems and deeper liquidity.

Developer abandonment: The official Blast account on X has been inactive since May 2025. The founder's page shows no posts in months. When core teams go silent, the community follows.

Protocol retreat: Even major DeFi protocols like Aave and Synthetix scaled back their Blast deployments, citing poor liquidity and limited returns. When blue-chip DeFi abandons your network, retail isn't far behind.

Blast isn't alone. Many emerging L2s have followed similar trajectories: heavy, incentive-driven activity ahead of a token generation event, a points-fueled surge in usage, then rapid post-TGE decline as liquidity and users migrate elsewhere.

The Rise of Enterprise Rollups​

While zombie chains wither, 2025 marked the rise of a new category: the enterprise rollup. Major institutions began launching or adopting L2 infrastructure, often standardizing on the OP Stack framework:

• Kraken's Ink: The exchange launched its own L2, recently announcing the Ink Foundation and plans for an INK token to power a liquidity protocol built with Aave.
• Uniswap's UniChain: The dominant DEX now has its own chain, capturing value that previously leaked to other networks.
• Sony's Soneium: Targeting gaming and media distribution, Sony's L2 represents traditional entertainment's blockchain ambitions.
• Robinhood's Arbitrum integration: The trading platform uses Arbitrum for quasi-L2 settlement rails for brokerage clients.

These networks bring something most indie L2s lack: captive user bases, brand recognition, and the resources to sustain operations through lean periods. The Optimism Superchain now comprises 34 OP Chains live on mainnet, with Base and OP Mainnet as the most active, followed by World, Soneium, Unichain, Ink, BOB, and Celo.

The consolidation around OP Stack isn't just technical preference—it's economic survival. Shared security, interoperability, and network effects make going alone increasingly untenable.

What Survives the Extinction?​

21Shares expects a "leaner, more resilient" set of networks to define Ethereum's scaling layer by end of 2026. The firm sees the landscape coalescing around three pillars:

1. Ethereum-aligned designs: Networks like Linea route value back to the main chain, aligning their success with Ethereum's ecosystem health rather than competing with it.

2. High-performance contenders: MegaETH and similar projects target near real-time execution, differentiating through speed rather than price. When everyone's cheap, being fast becomes the moat.

3. Exchange-backed networks: Base, BNB Chain, Mantle, and Ink leverage their parent exchanges' user bases and capital reserves to weather market downturns that would kill independent chains.

The DeFi TVL hierarchy reinforces this prediction. Base (46.58%) and Arbitrum (30.86%) dominate Layer 2 DeFi, with total value secured showing a similar concentration—together representing over 75% of the category.

The 2026 Roadmaps: Survivors Building for the Future​

The winning L2s aren't resting on their dominance. Their 2026 roadmaps reveal aggressive expansion plans:

Base: Coinbase's L2 is pivoting toward the creator economy via the "Base App"—a super app integrating messaging, wallet, and mini-apps. The potential total market size approaches $500 billion. Base is also exploring token issuance, though specifics on allocation, utility, and launch date remain unannounced.

Arbitrum: The $215M Gaming Catalyst Program deploys capital through 2026 to fund game studios and infrastructure, targeting SDKs for Unity/Unreal Engine integration. First funded titles launch Q3 2026. The ArbOS Dia Upgrade (Q1 2026) enhances fee predictability and throughput, while Orbit Ecosystem Expansion enables custom chain deployments across industries.

Optimism: The foundation announced plans to dedicate 50% of incoming Superchain revenue to monthly OP token buybacks starting February 2026—a move that transforms OP from pure governance token to one directly aligned with ecosystem growth. The Interop Layer Launch in early 2026 enables cross-chain messaging and shared security across Superchain networks.

The Implications for Builders and Users​

If you're building on a smaller L2, the writing is on the wall. The 61% usage decline across weaker networks since June 2025 isn't a temporary setback—it's the new normal. Smart teams are already migrating to networks with sustainable economics and proven traction.

For users, the consolidation actually brings benefits:

• Deeper liquidity: Concentrated activity means better trading conditions, tighter spreads, and more efficient markets.
• Better tooling: Developer resources naturally flow to dominant platforms, meaning superior wallet support, analytics, and application ecosystems.
• Network effects: The more users and applications concentrate on winning L2s, the more valuable those networks become.

The tradeoff is reduced decentralization and increased dependence on a handful of players. Base's dominance, in particular, raises questions about whether the L2 ecosystem is simply recreating Web2's platform concentration under a blockchain wrapper.

The Bottom Line​

Ethereum's Layer 2 landscape is entering its final form—not the diverse, competitive ecosystem many hoped for, but a tight oligopoly where three networks control nearly everything that matters. The zombie chains will linger for years, running on minimal activity while their teams pivot to other projects or slowly wind down.

For the winners, 2026 represents an opportunity to cement dominance and expand into adjacent markets. For everyone else, the question isn't whether to compete with Base, Arbitrum, and Optimism—it's how to coexist in a world they dominate.

The L2 extinction event isn't coming. It's already here.

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What if the bottleneck holding back blockchain wasn't software at all, but hardware? That's the premise behind Solayer's audacious new infrastructure play: a $35 million ecosystem fund backing applications built on infiniSVM, the first blockchain to leverage RDMA and InfiniBand networking technology borrowed from supercomputers and high-frequency trading floors.

The announcement, made on January 20, 2026, marks a pivotal moment in the ongoing race for blockchain scalability. While competitors inch toward 10,000 TPS with clever software optimizations, Solayer claims to have already achieved 330,000 TPS with sub-400ms finality on mainnet alpha, with a theoretical ceiling of one million transactions per second.

But raw speed alone doesn't build ecosystems. The real question is whether Solayer can attract the developers and use cases that make such extreme performance necessary.

The Hardware Revolution: RDMA and InfiniBand in Blockchain​

Traditional blockchains are constrained by networking protocols designed for general-purpose computing. TCP/IP stacks, operating system overhead, and CPU-mediated data transfers create latency that compounds across distributed networks. InfiniSVM takes a different approach entirely.

At its core, infiniSVM employs Remote Direct Memory Access (RDMA) technology, which allows nodes to read and write directly to each other's memory without involving the CPU or operating system kernel. Combined with InfiniBand networking, which is the backbone of the world's fastest supercomputers, infiniSVM achieves what Solayer calls "zero-copy data movement."

The technical architecture involves multiple execution clusters connected via Software-Defined Networking (SDN), enabling horizontal scaling that maintains atomic state consistency. This is the same infrastructure powering high-frequency trading operations, where microseconds determine profit or loss.

The numbers are staggering: 100+ Gbps network throughput, sub-50ms devnet finality (approximately 400ms on mainnet alpha), and sustained throughput of 300,000+ TPS. For context, Solana mainnet processes around 4,000 TPS under normal conditions, and Visa handles approximately 24,000 TPS globally.

The $35 Million Ecosystem Play​

Capital allocation tells you where smart money sees opportunity. Solayer's ecosystem fund, backed by Solayer Labs and the Solayer Foundation, is explicitly targeting four verticals:

DeFi Applications: High-frequency trading, perpetual exchanges, and market-making operations that have historically been impossible on-chain due to latency constraints. The fund is backing projects like DoxX, a hardware-accelerated MetaDEX featuring dual-engine architecture designed for institutional-grade, deterministic trade execution.

AI-Driven Systems: Perhaps most intriguingly, Solayer is investing in autonomous AI agents that execute blockchain transactions in real-time. Through their Accel accelerator program, they're backing buff.trade, a platform where AI agents execute tokenized trading strategies. The real-world performance of each agent directly influences the value of its associated token, creating a tight feedback loop between execution quality and on-chain economics.

Tokenized Real-World Assets: Spout Finance is building infrastructure for tokenizing traditional financial assets like U.S. Treasuries on infiniSVM. The combination of high throughput and fast finality makes on-chain treasury operations practical for institutional use cases.

Payments Infrastructure: The fund is positioning infiniSVM as backbone infrastructure for real-time payment processing, where the difference between 400ms and 12-second finality determines whether blockchain can compete with traditional payment rails.

Why Solana Compatibility Matters​

InfiniSVM maintains full compatibility with the Solana Virtual Machine, meaning existing Solana applications can deploy with minimal modification. This is a calculated strategic decision. Rather than building an ecosystem from scratch, Solayer is betting that performance-hungry Solana developers will migrate to infrastructure that removes their current bottlenecks.

The SVM itself is fundamentally different from the Ethereum Virtual Machine. While EVM processes transactions sequentially, SVM was designed around parallel execution using a runtime called Sealevel. Smart contracts on SVM declare their state dependencies upfront, allowing the system to identify which transactions can execute simultaneously across CPU cores.

InfiniSVM takes this parallelism to its logical extreme. By offloading network coordination to specialized hardware and eliminating traditional Ethernet-based node communication, Solayer removes constraints that limit even Solana's native performance.

The LAYER token uses SOL for gas, further reducing friction for Solana developers considering the platform.

The Institutional Finance Angle​

Solayer's timing coincides with a broader shift in institutional blockchain requirements. Traditional finance operates on millisecond timescales. When JPMorgan's Canton Network processes securities settlements, or when BlackRock's BUIDL fund manages tokenized treasuries, latency directly impacts the viability of blockchain integration.

The 300,000 TPS mainnet milestone, achieved in December 2025, represents the first sustained performance at this level on a public network. For institutional use cases requiring deterministic execution, this is table stakes rather than a nice-to-have feature.

The fund's focus on revenue-generating applications over speculative token projects reflects a maturing approach to ecosystem development. Projects must demonstrate clear business models and "strong fundamentals" to receive backing. This is a notable departure from the 2021-era playbook of subsidizing user acquisition through token emissions.

The Competitive Landscape​

Solayer isn't operating in a vacuum. The broader SVM ecosystem includes Eclipse (SVM on Ethereum), Nitro (Cosmos-based SVM), and Solana's own Firedancer validator client from Jump Crypto, which promises significant performance improvements.

Ethereum's roadmap toward parallel execution through sharding and danksharding represents a different philosophical approach: achieving scale through many chains rather than one extremely fast chain.

Meanwhile, chains like Monad and Sei are pursuing their own high-performance EVM strategies, betting that Ethereum compatibility outweighs the technical advantages of SVM.

Solayer's differentiation lies in hardware acceleration. While competitors optimize software, Solayer is optimizing the physical layer. This approach has precedent in traditional finance, where co-location services and FPGA-based trading systems provide edges measured in microseconds.

The risk is that hardware acceleration requires specialized infrastructure that limits decentralization. Solayer's documentation acknowledges this tradeoff, positioning infiniSVM for use cases where performance requirements outweigh maximal decentralization.

What This Means for Blockchain Development​

The $35 million fund signals a hypothesis about where blockchain infrastructure is heading: toward specialized, high-performance networks optimized for specific use cases rather than general-purpose chains trying to serve everyone.

For developers building applications that require real-time execution, whether high-frequency trading, AI agent coordination, or institutional settlement, infiniSVM represents a new category of infrastructure. The SVM compatibility layer reduces migration costs while hardware acceleration unlocks previously impossible application architectures.

For the broader ecosystem, Solayer's success or failure will inform debates about the scalability trilemma. Can hardware-accelerated infrastructure maintain sufficient decentralization while achieving throughput that matches centralized alternatives? The market will ultimately decide.

Looking Ahead​

Solayer's Q1 2026 mainnet launch represents the next major milestone. The transition from mainnet alpha to full production will test whether the 330,000 TPS figures hold under real-world load conditions with diverse application workloads.

The projects emerging from Solayer Accel, particularly the AI agent trading platforms and tokenized treasury infrastructure, will serve as proof points for whether extreme performance translates into genuine product-market fit.

With $35 million in ecosystem capital deployed, Solayer is making one of the more interesting bets in the 2026 infrastructure wars: that the future of blockchain scaling isn't in software optimization alone, but in rethinking the hardware layer entirely.

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BlockEden.xyz provides high-performance RPC and API infrastructure for SVM-compatible blockchains including Solana. As the ecosystem expands to high-throughput networks like infiniSVM, our infrastructure scales alongside developer needs. Explore our API marketplace for enterprise-grade blockchain connectivity.

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Sources​

• Solayer and Hack VC Unveil the Future of Real-Time Blockchains with InfiniSVM
• Solayer Launches $35 Million Ecosystem Fund
• Solayer unveils $35M fund for real-time DeFi, AI and tokenization apps - CoinDesk
• Solayer Mainnet Alpha Goes Live - Benzinga
• Solayer Official Documentation
• What is the Solana Virtual Machine (SVM)? - Helius

What if blockchain transactions were as instant as pressing a button in a video game? That's the audacious promise of MegaETH, the Vitalik Buterin-backed Layer 2 that's launching its mainnet and token this January 2026. With claims of 100,000+ transactions per second and 10-millisecond block times—compared to Ethereum's 15 seconds and Base's 1.78 seconds—MegaETH isn't just iterating on existing L2 technology. It's attempting to redefine what "real-time" means for blockchain.

After raising $450 million in its public sale (from $1.39 billion in total bids) and securing backing from Ethereum's co-creator himself, MegaETH has become one of the most anticipated launches of 2026. But can it deliver on promises that sound more like science fiction than blockchain engineering?

Ethereum validators currently process transactions the way a grocery store checkout works with a single lane: one item at a time, in order, no matter how long the line stretches. The Glamsterdam upgrade, scheduled for mid-2026, fundamentally changes this architecture. By introducing Block Access Lists (BAL) and enshrined Proposer-Builder Separation (ePBS), Ethereum is preparing to scale from roughly 21 transactions per second to 10,000 TPS—a 476x improvement that could reshape DeFi, NFTs, and on-chain applications.