Raoul Pal sees Ethereum’s larger financial balances as a reason to question Solana’s user-growth advantage. His comparison also reveals how easily blockchain adoption figures can mislead.
Key Takeaways
- Pal compares capital with the active-user count.
- Ethereum leads in DeFi and stablecoin balances.
- More active addresses can lower the ratio.
- Network usage does not guarantee token returns.
Asked in a Cointelegraph Trade Secrets interview whether Solana could overtake Ethereum by market capitalization, the Real Vision founder acknowledged the possibility but questioned whether its growing activity was enough. His comparison focused on the capital held on each network relative to its active users.
What Pal means by value per user
“The economic density of a user on Ethereum is about two hundred thousand dollars,” he said. “That’s TVL per active user. On Solana, it’s about 2,500.”
Total value locked, or TVL, measures assets deposited in decentralized-finance protocols. Dividing that total by an active-user count produces Pal’s measure of economic density, but the resulting $200,000 does not describe what a typical Ethereum user owns or has deposited.
Pal gives greater weight to substantial lending balances, collateral and other financial assets than to frequent, smaller transactions. That explains his distinction between Ethereum’s financial depth and Solana’s activity, which he described as primarily speculative while acknowledging its place in the market.
The financial balances behind his argument
DefiLlama’s October 3 figures support Ethereum’s greater financial scale. Its Ethereum dashboard reported considerably more DeFi deposits and stablecoins than its Solana dashboard, although both networks held billions of dollars in each category.
Ethereum leads in both measures, but Solana’s balances complicate a purely speculative description of the network. Stablecoin supply cannot establish how much is used for payments, so settlement programmes provide another way to examine its financial uses.
Visa’s April update lists both Ethereum and Solana among the networks supported by its stablecoin settlement pilot. The company does not disclose how much activity runs on either chain, but the programme provides a concrete financial use case beyond speculative trading.
Payments, borrowing and cash management give digital dollars uses beyond buying crypto, as Coindoo’s analysis of how stablecoins bring financial activity on-chain explains. For the comparison with Ethereum, the useful question is whether Solana can build sustained use in these markets alongside its trading activity.
Why capital per user needs context
Those financial balances help assess Pal’s argument, but they do not verify his specific per-user estimates. He did not provide the dataset or measurement window for those figures in this exchange, so the calculation cannot be reproduced from the interview alone.
A hypothetical example shows why the denominator matters. A network with $1 billion deposited in DeFi and 10,000 active addresses has $100,000 in TVL per active address. If the address count rises to 100,000 while deposits remain unchanged, the ratio falls to $10,000.
The ratio has fallen by 90%, even though the network holds the same capital and has ten times as many active addresses. Conversely, a high ratio can reflect substantial deposits spread across relatively few active addresses. The direction of the ratio therefore needs to be read alongside changes in both capital and activity.
Even that example counts addresses rather than people. One person can operate several addresses, while a service can represent many customers. Coin Metrics’ methodology illustrates the distinction: it counts unique addresses participating in specified ledger changes during a defined period.
The capital side can change without new deposits too. If tokens already deposited in DeFi appreciate, their dollar value rises. DefiLlama separates asset inflows from price effects, allowing readers to distinguish additional deposits from an increase caused by the market.
The network boundaries also need to match. Pal includes Ethereum’s layer-two ecosystem in his broader infrastructure argument, whereas the table reports mainnet balances. Combining capital across Ethereum and its layer twos with a mainnet-only user count would produce a different measure from one covering the same networks on both sides.
How network activity reaches ETH and SOL
For investors, the remaining question is how this activity affects the token they hold. Pal emphasized adoption when discussing low-cost transactions, saying: “These are not businesses, these are infrastructure layers.” Affordable transactions can help applications attract users, but the network’s usefulness still needs to be connected to its token economics.
On Ethereum, transaction fees are paid in ETH. The protocol burns the base fee, removing that ETH from circulation, while the priority fee goes to the validator. Ethereum’s fee documentation explains how those charges respond to demand for transactions.
Solana also charges fees in its native token. Under its fee rules, half the base fee is burned and half goes to the validator, while priority fees go entirely to the validator. These arrangements connect usage to SOL payments and changes in supply, although they do not establish a proportional relationship between transaction growth and price.
Neither arrangement gives ETH or SOL holders a claim on every application’s income. A successful business can use a blockchain without sharing its profits with the token’s owners, a distinction covered in Coindoo’s explanation of what SOL is used for.
That leaves the same questions for both networks: are they attracting recurring financial activity, retaining capital and creating demand for their native tokens? Ethereum’s larger balances support Pal’s argument about financial depth today. Deciding whether ETH or SOL offers better investment value also requires weighing those developments against the price investors already pay.
This article is for informational purposes only and does not constitute investment advice. Pal’s comments reflect his views, and network metrics can change.
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