How economical is the Solana blockchain?
Ethereum co-founder Joseph Lubin: Competitors must "find a more sustainable business model for the network"

Ethereum co-founder Joseph Lubin has questioned the sustainability of competing projects, including the fast-growing Solana blockchain, as venture capital flows into a number of new cryptocurrency networks.
The Ethereum blockchain has become one of the world's most widely used digital ledgers, but has faced challenges from competitors like Solana, which has set lower transaction fees to attract users.
Lubin told the Financial Times that Solana, which touts itself as a faster and cheaper alternative to Ethereum, over-rewards users who validate transactions on the network compared to the revenue generated by those transactions.
Solana needs to "find a more sustainable business model for the network," Lubin said.
"It's natural," he said. "All projects in our ecosystem essentially fake it until they make it or they die."
The fast-growing blockchain project has faced doubts before. Some critics have argued that Solana sacrifices security for greater efficiency, and the network has experienced several significant outages.
In response to Lubin's criticism, Solana said that simply looking at log revenue doesn't tell the full story of the "long-term performance" of a blockchain's economic model.
Lubin's comments came at a time when tech investors are making big bets on new projects trying to create more efficient alternatives to Ethereum -- including Avalanche, Near Protocol and Solana -- in a race to steer clear of growing mainstream interest in cryptocurrency applications to capitalize.
ConsenSys, a cryptocurrency software company led by Lubin and closely associated with Ethereum, said on Tuesday that it more than doubled its valuation from $450 million to $7 billion in a new funding round. The company's value has skyrocketed as an influx of new users turned to its products to navigate Ethereum.
Ethereum is the most widely used digital ledger for fast-growing areas like decentralized finance and non-fungible tokens. Lubin has become one of Wall Street's most vocal supporters of the project after helping develop the network.
MetaMask, an app developed by ConsenSys with more than 30 million monthly active users, has racked up nearly $330 million in transaction fees since the end of 2020 from a feature that allows users to trade between cryptocurrency tokens on Ethereum, according to public data.
Venture capitalists invested the new money in ConsenSys Software, a company Lubin founded with help from JPMorgan during a restructuring that was completed in 2021.
Previously, almost three dozen former employees of the Swiss predecessor company ConsenSys AG had challenged the legality of the restructuring and requested a special audit. Employees have claimed that the intellectual property behind MetaMask and other key products transferred to the new company has been undervalued.
Lubin said ConsenSys was "very open" in negotiating with the former employees and showed "understanding of their concerns" and that the company's products were effectively "pre-monetization" at the time of the transaction.
"It's a very different world in our ecosystem as we cross the gap to mainstream acceptance than it was during the darkest moments of Covid," Lubin said.
ParaFi Capital, a cryptocurrency venture firm backed by KKR, led the new funding round at ConsenSys. Microsoft, Singapore-based Temasek and SoftBank's second Vision Fund also invested.
ConsenSys declined to comment on whether Lubin or other shareholders sold any shares as part of the financing.
