A question that is frequently asked is whether Ethereum will ever be replaced by another network. This question often comes alongside inquiries about the key differences between Layer-1 networks and their approaches to addressing the challenges Ethereum has introduced to the world of crypto.
To recap, a Layer-1 blockchain is the foundational layer responsible for handling consensus and the execution of transactions and smart contracts. To make it easier to understand, let’s categorize these type of networks into two main groups (excluding Layer-2 solutions):
Similar networks (networks based largely on the same set of technologies or even compatible with Ethereum) with additional features. We will refer to these as EVM-compatible networks, for example: Solana, Binance Smart Chain, Polygon, Tron, Toncoin, Cardano, Avalanche, NEAR.
Note: sometimes these networks are natively incompatible without additional efforts to make them compatible (such as a sidechain or a form of virtualization) but to keep complexity they are included as well.
Novel networks (networks based largely on a new set of technologies and therefore being largely incompatible with Ethereum) with equivalent features. We can refer to them as EVM-Equivalent networks, for example: Sui, Aptos, Sei, Kaspa, Stellar, Filecoin, Hedera.
The blockchain landscape has been dominated by Ethereum for years, with its robust smart contract capabilities and widespread adoption. However, as the network continues to face scalability and congestion issues amongst other issues like security, cost and user-experience, various Layer-1 blockchains have emerged, each vying for the title of “Ethereum Killer.” Networks like Solana, Avalanche, and Cardano have all taken different approaches to outpace Ethereum, yet none have fully succeeded in dethroning the giant. When it comes to EVM-equivalent networks, Sui Network—is a new contender with rapid growth with origins from Meta’s Diem project that could be the true game-changer in the race to overcome Ethereum’s limitations.
The Rise of Layer-1 Competitors
How have other EVM-compatible networks tried to surpass Ethereum?
Solana: Known for its high throughput, Solana uses a unique consensus mechanism called Proof of History (PoH) combined with Proof of Stake (PoS). This allows Solana to process thousands of transactions per second (TPS), far surpassing Ethereum’s current capabilities. However, Solana has faced issues with network stability and centralization concerns, leading some to question its long-term viability.
Avalanche: Avalanche offers a highly flexible platform with its Avalanche consensus protocol, which allows for sub-second transaction finality and the ability to create custom blockchains. Avalanche’s unique architecture supports interoperability between multiple chains, making it a strong contender. Yet, like Solana, it has struggled with decentralization and network congestion at scale.
Cardano: Cardano takes a more methodical, research-driven approach, emphasizing security and scalability through its Ouroboros PoS consensus protocol. Cardano’s development has been slower, with some critics pointing to its lack of decentralized applications (dApps) and real-world usage as significant drawbacks.
EVM-Equivalent networks are taking a different approach; they are not just facing the challenge of getting users to switch for enhanced functionality, but also developers to switch to a different, potentially better, way of building decentralized applications. For example:
Sui Network: aims to offer developers and users alike a safer, faster and more user-friendly environment for using, connecting and developing applications. It does this with a full redesign on the consensus and execution of transactions and smart contracts as well as a completely new smart contract language called Move.
The Layer-2 Conundrum: Scaling Ethereum
Ethereum has been working to address its scalability issues through the development of Layer-2 (L2) solutions like Optimism, Arbitrum, and zk-Rollups. These L2 solutions aim to offload transactions from the Ethereum mainnet, thereby increasing throughput and reducing fees. While L2 solutions offer a promising path forward, they come with trade-offs:
Complexity: Users must interact with multiple layers, which can complicate the user experience and lead to fragmentation within the ecosystem.
Security Concerns: Since L2 solutions rely on Ethereum’s base layer for security, they may inherit vulnerabilities and create new attack vectors.
Limited Interoperability: L2 solutions often face challenges in maintaining seamless interoperability with other blockchains and L1 solutions.
While L2s provide a temporary solution, they may not fully resolve Ethereum’s fundamental issues. This is where a new EVM- Equivalent network such Sui Network could step in as a more comprehensive alternative. At the same time, Ethereum as a protocol is far from finished and developers may be able to tackle these obstacles towards mass adoption over time while other networks are trying to reinvent the wheel and struggle to get a critical mass.
This is not financial research but the opinion of the author of the article. We publish this information to inform and educate about recent market developments and technological updates, not to give any recommendation for certain products or projects. The selection of articles should therefore not be understood as financial advice or recommendation for any specific product and/or digital asset. We may occasionally include analysis of past market, network performance expectations and/or on-chain performance. Historical performance is not indicative for future returns.
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Franklin MSCI World Catholic Principles UCITSETF USD Capitalisation (FLXA ETF), ISIN IE000AZOUN82, försöker spåra MSCI World Select Catholic Principles ESG Universal och Low Carbon-index. MSCI World Select Catholic Principles ESG Universal och Low Carbon Index spårar stora och medelstora värdepapper från utvecklade länder över hela världen. De utvalda företagen screenas enligt deras koldioxidexponering, deras ESG-profil (miljö, social och styrning) och katolska principer. Som ett resultat är företag som är involverade i vapen, hasardspel, vuxenunderhållning, abort, preventivmedel, stamcellsforskning och djurförsök uteslutna.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,27 % p.a. Franklin MSCI World Catholic Principles UCITSETF USD Capitalization är den enda ETF som följer MSCI World Select Catholic Principles ESG Universal och Low Carbon-index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Franklin MSCI World Catholic Principles UCITSETF USD Capitalization är en liten ETF med tillgångar på 34 miljoner euro under förvaltning. Denna ETF lanserades den 24 april 2024 och har sin hemvist i Irland.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest, SAVR och Avanza.
2024 was a landmark year for bitcoin, solidifying its role as a fully institutionalised asset class.
Institutional inflows into physical bitcoin exchange-traded products (ETPs) reached nearly $35 billion globally, signalling a major shift in how traditional investors view crypto. As bitcoin continued to enhance portfolios’ risk-return profiles, more institutional investors followed suit, reshaping the financial landscape.
Looking ahead, 2025 promises to bring exciting developments across the crypto ecosystem. Here are the top five crypto trends to watch.
Fear of being left behind
The era of bitcoin as a niche investment is over. Institutional adoption is creating a ripple effect, forcing hesitant players to reconsider. Portfolios with bitcoin allocations are consistently outperforming those without, highlighting its growing importance.
Source: Bloomberg, WisdomTree. From 31 December 2013 to 30 November 2024. In USD. Based on daily returns. The 60/40 Global Portfolio is composed of 60% MSCI All Country World and 40% Bloomberg Multiverse. You cannot invest directly in an index. Historical performance is not an indication of future performance and any investment may go down in value.
With bitcoin’s ability to noticeably improve portfolios’ risk-return profiles, asset managers face a clear choice: integrate bitcoin into multi-asset portfolios or risk falling behind in a rapidly evolving financial landscape. In 2025, expect the competition to heat up as clients demand exposure to this powerhouse cryptocurrency.
Expanding crypto investment options
In 2024, regulatory breakthroughs opened the doors for physical bitcoin and ether ETPs in key developed markets. This marked a critical step towards making cryptocurrencies mainstream, providing seamless access to institutional and retail investors alike.
Figure 2: Global physical crypto ETP assets under management (AUM) and 2024 net flows
Source: Bloomberg, WisdomTree. 02 January 2025. Historical performance is not an indication of future performance and any investment may go down in value.
In 2025, this momentum is expected to accelerate as the crypto regulatory environment becomes more friendly in the United States and as key developed markets follow Europe’s lead and approve ETPs for altcoins such as Solana and XRP. With their clear utility and growing adoption, these altcoins are strong candidates for institutional investment vehicles.
This next wave of altcoin ETPs will expand the diversity of crypto investment opportunities and further integrate cryptocurrencies into the global financial system.
The maturing of Ethereum’s layer-2 ecosystem
Ethereum’s role as the backbone of decentralised finance (DeFi), non-fungible tokens (NFTs), and Web3 is unmatched, but its scalability challenges remain a hurdle. Layer-2 solutions—technologies such as Arbitrum and Optimism—are transforming Ethereum’s scalability and usability by enabling faster, cheaper transactions.
In 2025, Ethereum’s recent upgrades, such as Proto-Danksharding (introduced in the ‘Dencun’ upgrade), will drive layer-2 adoption even further. Innovations like Visa’s layer-2 payment platform leveraging Ethereum for instant cross-border transactions will underscore the platform’s evolution.
Expect Ethereum’s layer-2 ecosystem to power real-world use cases ranging from tokenized assets to decentralised gaming, positioning it as the infrastructure of a truly scalable digital economy.
Stablecoins: bridging finance and blockchain
Stablecoins are becoming indispensable to the global financial system, offering the stability of traditional assets with the efficiency of blockchain. Platforms such as Ethereum dominate the stablecoin landscape, hosting stablecoin giants Tether (USDT) and USD Coin (USDC), which facilitate billions in daily transactions.
Figure 3: Key stablecoin chains
Source: Artemis Terminal, WisdomTree. 05 January 2025. Historical performance is not an indication of future performance and any investment may go down in value.
As we move into 2025, stablecoins will increasingly interact with blockchain ecosystems such as Solana and XRP. Solana’s high-speed, low-cost infrastructure makes it ideal for stablecoin payments and remittances, while XRP Ledger’s focus on cross-border efficiency positions it as a leader in global settlements. With institutional adoption rising and DeFi applications booming, stablecoins will serve as the backbone of a seamless, interconnected financial ecosystem.
Tokenization: redefining ownership and revolutionising finance
Tokenization is set to redefine how we think about ownership and value. By converting tangible assets like real estate, commodities, stocks, and art into digital tokens, tokenization breaks down barriers to entry and creates unprecedented liquidity.
In 2025, tokenization will expand dramatically, empowering investors to own fractions of high-value assets. Platforms such as Paxos Gold and AspenCoin are already showcasing how tokenization can revolutionize markets for gold and luxury real estate. The integration of tokenized assets into DeFi will unlock new financial opportunities, such as using tokenized real estate as collateral for loans. As tokenization matures, it will transform industries ranging from private equity to venture capital, creating a more inclusive and efficient financial system.
For the avoidance of any doubt, tokenization complements crypto by expanding the use cases of blockchain to include real-world applications.
Looking ahead
2025 is set to be a defining year for crypto, as innovation, regulation, and adoption converge. Whether it is bitcoin cementing its position as a portfolio staple, Ethereum scaling for mainstream use, or tokenization unlocking liquidity in untapped markets, the crypto ecosystem is poised for explosive growth. For investors and institutions alike, the opportunities have never been clearer or more compelling.
This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
Fidelity Sustainable Research Enhanced Global Equity UCITSETFAcc (FGLR ETF) med ISIN IE00BKSBGV72, är en aktivt förvaltad ETF.
Denna ETF investerar i aktier från utvecklade marknader över hela världen. Värdepapper väljs ut enligt hållbarhet och grundläggande kriterier.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,25 % p.a. Fidelity Sustainable Research Enhanced Global Equity UCITSETFAcc är den enda ETF som följer Fidelity Sustainable Research Enhanced Global Equity-index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Fidelity Sustainable Research Enhanced Global Equity UCITSETFAcc är en liten ETF med tillgångar på 45 miljoner euro under förvaltning. Denna ETF lanserades den 27 maj 2020 och har sin hemvist i Irland.
Investeringsmål
Fonden strävar efter att uppnå långsiktig kapitaltillväxt från en portfölj som huvudsakligen består av aktier i företag med säte globalt.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest, SAVR och Avanza.