Written by: Little Pie

Kyle Samani, co-founder of Multicoin Capital, stated in an interview with Cointelegraph on September 21 that he expects SOL's market capitalization to surpass ETH in this cycle. He also claimed, "No one is really using Ethereum today," and described the value capture capability of ETH, with a market value of about $300 billion, as "questionable."

This is Samani's first major public statement since stepping down as a managing partner of Multicoin in February this year. At that time, in a tweet he later deleted, he wrote, "I used to believe in the web3 vision, not anymore."

In September, he returned with a new role and joined the U.S. board of the cryptocurrency trading platform Backpack.

Background needed: Multicoin Capital manages $5.9 billion in assets and led the earliest funding rounds for Solana in 2018, with SOL being one of its core holdings. Samani himself is one of Solana's most long-term and staunch public supporters. Every public statement he makes about SOL is directly related to his positions and investments.

What did Samani say?

He made three core judgments:

"No one is really using Ethereum today." He believes that Ethereum maintains its leading position mainly due to two things: the supply of stablecoins on-chain and stablecoin lending collateralized by ETH. Besides this, real user activity is shifting towards Solana.

"The value capture of ETH is questionable." He stated that ETH is a $300 billion asset, but its growth is stagnant, and he "doesn't understand why investors would want to hold it at the current valuation," believing there are many other investment opportunities with more reasonable prices in the market.

"SOL's market capitalization will surpass ETH in this cycle." He anticipates that more and more cryptocurrency companies will switch their default networks from Ethereum to Solana because Solana is "the most feature-complete network among all companies," making it simpler to integrate business onto Solana.

Data Verification

Samani's arguments are not entirely without basis. However, looking at the data reveals a more complex picture than he described.

In terms of fee revenue, Solana has indeed won.

According to DefiLlama data, Solana generated about $23 million in on-chain fees in the past 30 days, ranking fourth across the network. Ethereum L1 only generated about $12.6 million, ranking sixth.

This data directly supports Samani's judgment that "Ethereum user activity is declining." After Ethereum launches EIP-4844 in March 2024, the data fees paid from L2 to L1 will significantly decrease, resulting in a corresponding shrinkage of L1’s direct income.

User activity, Solana leads significantly.

Solana's weekly active addresses are about 29.84 million, 12 times Ethereum's 2.46 million. Weekly DEX trading volume is about $11.5 billion, which also exceeds Ethereum's $7.6 billion. If "how many people are doing things on-chain" defines "usage," Solana has indeed won.

However, in terms of capital accumulation, Ethereum remains on another level.

Ethereum L1's DeFi TVL is approximately $55.6 billion, combined with L2 totals around $80 billion to $123 billion. Solana has about $8 billion to $12 billion. The gap is between 7 to 10 times.

The disparity in stablecoins is even more pronounced. Ethereum hosts about $163 billion in on-chain stablecoins, while Solana has around $15.2 billion. In 2025, the settlement volume of stablecoins on Ethereum is expected to exceed $18.8 trillion.

In the RWA and tokenized asset space, BlackRock's BUIDL fund ($2.87 billion) is primarily deployed on Ethereum. The SEC has just released an "innovation exemption" for tokenized stocks that requires using public blockchains, with Ethereum and Circle's Arc being the most compliant infrastructures currently.

Developer ecosystem, Ethereum still holds an advantage.

Ethereum has about 31,869 active developers, while Solana has about 17,708. Ethereum leads by approximately 1.8 times. The maturity of the Solidity ecosystem's toolchain and the scale of its developer community are still the largest in the industry.

Staking yield, Solana is more attractive.

Ethereum's staking APY is about 3% to 5%. Solana ranges from about 4.2% to 9% (including MEV acceleration). For holders seeking yield, SOL offers a higher return on holding.

SOL's current market capitalization is about $58 billion, while ETH's is about $293 billion. To surpass, SOL would need a market cap expansion of 5 times, or ETH to shrink significantly, or both to happen simultaneously.

In the past month, ETH rose about 30%, while SOL increased about 34%. The trends are highly correlated, and SOL's excess returns are limited. In the past year, ETH dropped about 45%, and SOL fell about 59%, indicating that SOL experienced a larger decline.

This is summarized in an image below:

Samani's narrative has a clear logic: wherever the users go, the capital will eventually follow. Solana's lead in retail activity is a fact, but whether this lead can translate into a sustained migration of institutional capital is the key variable that determines whether surpassing will occur.

Note: Kyle Samani is the co-founder of Multicoin Capital and has held a significant position in SOL since 2018. The views quoted in this article are from his public statements during the Cointelegraph interview and do not represent the positions or investment advice of Deep Tide TechFlow.