As Ethereum lags with 70% gains in 2024, emerging L1 networks like Graphite are stepping up, offering faster speeds, lower costs, and a trust-driven blockchain ecosystem.

With the end of 2024 quickly approaching, Ethereum records a year-to-date gain of over 70%, significantly falling behind other leading cryptocurrencies such as Bitcoin and Solana, which rose by 142% and 107%, respectively. 

Bitcoin continues to dominate investor interest, benefiting from its robust deflationary structure and reputation as an efficient store of value. In contrast, Solana’s technical advantages, particularly its speed and cost-efficiency, make it the go-to choice for developers in the DeFi and NFT sectors.

Why is Ethereum underperforming in 2024?

Bitcoin’s appeal lies in its fixed supply and carefully regulated inflation mechanisms, which offer unmatched security, stability, and predictability. On the other hand, Ethereum faces challenges with its net issuance due to a significant reduction in gas fee burns. 

According to recent findings from CoinShares, the growth of layer-2 solutions like Arbitrum and Optimism has diverted significant activity away from Ethereum’s core layer-1 network. This shift has drastically decreased ETH supply burns, undermining Ethereum’s once-praised deflationary model.

In addition, other L1s, particularly Solana, have surged ahead with faster transaction speeds and reduced costs, attracting a growing user base. As of October, the number of monthly active wallets on Solana hit 138 million, a 245% increase since August. Alongside this growth, Solana’s total value locked saw significant gains, capturing 2.7% of Ethereum’s TVL inflows year-to-date. In contrast, Ethereum has struggled, registering net outflows amounting to $6 billion in 2024.

Beyond Solana, another emerging Ethereum alternative is making headlines with its recent market launch. 

Enhanced on-chain speed and scalability: Graphite vs. Ethereum vs. Solana 

Graphite Network has introduced its proprietary L1 blockchain platform, designed to handle high transaction volumes with a capacity of up to 1,400 transactions per second and confirmation times of less than 10 seconds, a performance that significantly surpasses Ethereum’s limited transaction speeds, which hover around 15-20 tps. 

Graphite’s transaction model also maintains a clear fee rate, allowing users to predict their expenses upfront and avoid scenarios similar to Ethereum’s “gas bidding wars” during block sealing.

Additionally, Graphite’s Ethereum-compatible virtual machines simplify the transition of Solidity smart contracts onto the network, allowing developers to scale their existing decentralized applications without the extra resources required to build on blockchains like Solana. 

Why Graphite is not just another L1

Graphite utilizes a Proof-of-Authority (PoA) consensus model and the Polymer 2.0 algorithm, thus relying on a network of trusted, authorized nodes for validating blocks. This approach dramatically improves operational efficiency by minimizing the energy and computational requirements typically associated with traditional Proof-of-Work systems.

Graphite’s transaction model offers a passive income opportunity for entry-point (transport) nodes, a feature that sets it apart from other blockchains, where only resource-intensive validator nodes earn rewards. Transport node operators will receive 50% of the transaction fees processed through their nodes, while the other 50% will go to block sealers.

By making it feasible for nearly any participant to earn from operating an entry-point node without extensive server demands, Graphite democratizes blockchain access and creates an ecosystem where any user contributing to the network’s functionality is equitably rewarded.

On top of that, Graphite is pioneering a reputation-based approach within the blockchain space, bridging traditional finance (TradFi) with the core mechanics of web3. Central to this vision is a set of features that establish a secure and trust-oriented blockchain environment. 

Its account activation feature enforces a “One User, One Account” policy, preventing the creation of multiple disposable wallets, which are often linked to fraudulent behavior. Through its multi-layered KYC verification, Graphite helps individuals and businesses balance privacy needs with the requirement for transparency. The KYC transaction filters enable users to apply KYC-based transaction filters, giving them control over who they interact with. And the Trust Score system assigns a credibility rating to each account, ensuring a secure and trustworthy network environment.

Graphite prioritizes both privacy and reputation by leveraging Zero Knowledge Proof technology to verify data for decentralized applications without exposing the data itself while keeping all KYC processes off-chain. 

The network’s KYC requirements are designed to be far less intrusive compared to those in TradFi, allowing blockchain users to maintain a level of anonymity that aligns with their expectations.

Graphite will also implement tagged addresses, which allow users to label wallets linked to specific entities. This ensures proper fund usage while making any misuse instantly detectable on the blockchain. 

Moreover, Graphite’s smart ticker system appends the @G symbol to all coins integrated with its blockchain. This mechanism provides a seamless method for network identification and promoting ecosystem clarity.

A new era of trust in blockchain

From a global perspective, Ethereum’s current challenges are part of a broader evolution in the blockchain industry, where other L1 networks like Graphite are creating new entry points for mass audiences. Graphite Network addresses not only Ethereum’s scalability and cost limitations but also creates a trust-driven, user-centric blockchain environment.