Dragonfly Research Calls Ethereum the 'MS-DOS' of Blockchains

An experiment by Dragonfly Research compared the performance of each blockchain by testing the capabilities of automated market makers (AMMs) on six blockchains, and found that Solana's Orca DEX was significant in terms of transactions processed per second winner.

It manages 273.34 transactions per second and creates a new block every 590 milliseconds.

Binance Smart Chain (BSC) followed with 194.6 transactions per second on PancakeSwap, followed by Polygon (MATIC), Avalanche (AVAX), Celo (Celo), and finally Ethereum (ETH).

A blog post by researcher "GM" argues that while a rich ecosystem has been built on Ethereum Virtual Machine (EVM) compatible chains, the results show that "if you want real high performance today, you have to build on the EVM Look outside." A now-deleted sentence from an earlier version of the article implied that users would eventually need to "give up the EVM."

Dragonfly Research, the research arm of Dragonfly Capital, has invested in Celo, Avalanche, Cosmos and Near, according to its portfolio page. It hasn't invested in Solana yet.

The GM concludes that over time, other layer 1 blockchains will surpass EVM compatible chains. He wrote:

“In general, my thoughts are: Ethereum is the MS-DOS (Microsoft Disk Operating System) of smart contract operating systems. But the current era of blockchain brings us to the era of Windows 95.”

The EVM chain is a blockchain compatible with Ethereum tools. They generally contribute to the scalability of the Ethereum network.

The results of the experiment were announced on March 2. It attempts to compare the throughput of blockchains by measuring how many swaps can occur per block on native automated market makers. AMMs refer to decentralized exchanges (DEXs) that facilitate on-chain non-custodial token swaps, such as Uniswap and PancakeSwap.

The basic question the GM is trying to answer is: "If you filled an entire block with Uniswap v2-style transactions, how many transactions would be cleared per second?"

Using Uniswap V2 as a benchmark as it is the dominant DEX with $1.6 billion in 7-day trading volume. According to the report, the benchmark is 18.38 transactions per second, with a new block produced every 13.2 seconds. Author GM notes that while it's not a perfect benchmark, it's "illustrative in terms of overall viewing performance."

The leading DEXs on each blockchain tested performed token swaps on the most liquid trading pairs to determine their current capacity limits. They did not test the rollup extension on the first layer chain, because rollup can be used on all chains.

While the 5 EVM chains in the experiment could be tested in the same way, Solana requires a different approach, which the GM noted in a subsequent blog post.

AMM Tests Evaluate Blockchain Performance

GM wrote that none of the blockchains in the test were fully utilized, and he expects “over time, the performance of all major L1s will improve.”

While the reported results show Solana's faster performance, proponents of decentralization point to other problems with Solana. The team behind the EVM-compatible Spookyswap DEX on Fantom Opera criticized the findings, telling Cointelegraph that Solana “is a fully centralized network, unlike Ethereum.”

Solana has also been plagued by service outages, raising concerns about network security and the reliability of applications in the ecosystem. The Spookyswap team added:

“Solana can be shut down and has a history of being down for days on end. You don’t see that in EVM layer 1 chains.”

The GM calls on readers to "do the math for yourself" to confirm or refute the conclusions he draws. He also pointed out that optimizations on blockchains happen very quickly, so as new optimizations are introduced on any chain, results may vary.

He also concluded that the maximum performance difference between Ethereum and Solana was only 25x, suggesting that in general, “nobody can get that much performance out of linear token transactions on-chain.”

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