Solana's 40 Million Daily Transactions Drive Debate on Core Blockchain Valuation Metrics

A prominent voice in the cryptocurrency space, Tom Dunleavy, Chief Investment Officer and Partner at Master Ventures Capital, has ignited a discussion regarding the appropriate metrics for valuing Layer 1 (L1) blockchains, asserting that traditional "revenue" figures are misleading. Dunleavy, a lead analyst at Messari, emphasized that networks like Ethereum and Solana are "THRIVING," citing their robust on-chain activity, including Total Value Locked (TVL), active addresses, transaction volume, application revenue, and stablecoin activity, which he states are "at or near ATHs for both."

Dunleavy contends that "revenue" for L1s is "anti-network effect and counterproductive to ecosystem growth." He explained that the fundamental purpose of these networks is to facilitate "low friction, decentralized, financial activity," making revenue a suitable metric for applications but detrimental for the underlying networks themselves. "Higher 'fees' have no tie to reinvestment by interested actors," he stated in a recent social media post, adding that lower fees at the L1 layer encourage more building and activity.

This perspective challenges the conventional view, especially as Solana has recently surpassed Ethereum in Real Economic Value (REV), a metric tracking user payments to blockchains. Solana's REV reached a record $551.6 million in January 2025, nearly tripling Ethereum’s around $166 million, largely driven by memecoin activity and priority fees. However, Dunleavy argues that this shift in REV does not reflect the true economic health or value of the networks.

Instead, Dunleavy champions the "Total Economic Activity (TEA)" metric, developed by Artemis, as a more comprehensive measure. TEA encompasses Chain Fees & Maximal Extractable Value (MEV), Settlement Volume (including Decentralized Exchange (DEX) volumes, NFT volumes, and peer-to-peer transfers), and Application Fees. Artemis posits that TEA treats blockchains as economies and demonstrates a strong correlation with market capitalization, providing a holistic view of on-chain activity.

Recent data underscores the vibrant activity on both chains. Ethereum continues to lead in Total Value Locked (TVL), holding over $96 billion across its DeFi protocols and a stablecoin market capitalization exceeding $100 billion. Meanwhile, Solana has emerged as a leader in user engagement and transaction throughput, processing over 40 million daily transactions and boasting more than 3 million daily active addresses, significantly outpacing Ethereum's 1.1-2.02 million daily transactions and 300,000-550,000 active addresses. Solana's low average transaction fee, around $0.00025, contributes to its high-volume model.

Dunleavy asserts that "new assets, need new valuation frameworks," suggesting that the focus should shift from fee-based revenue to broader economic activity that reflects the network's utility and growth. As fees decline due to network optimizations and Layer 2 solutions, economic activity is "picked up elsewhere," a trend that TEA aims to capture more effectively than traditional revenue metrics.