Ethereum Risks Losing Builders to Solana Over Hackathon Fetish, Expert Urges Strategic Rethink

Ethereum (ETH) blockchain faces a builder exodus as rival ecosystems like Solana (SOL) gain traction.

The allure of the Solana blockchain for developers includes superior support for startups and streamlined user experiences.

Ethereum Hackathon Missteps Drive Builders To Solana

Ethereum has long been the leading smart contract platform for decentralized applications (dApps). However, this position is now under threat, with Jacob Franek, co-founder of Alliance crypto accelerator, issuing a stern warning.

According to Franek, Ethereum’s over-reliance on hackathons fails to deliver meaningful innovation. In his opinion, this lapse could cost the network its edge.

“If the Ethereum community wants to reverse this trend it needs to support great builders building apps,” Franek said.

Franek notes that hackathons are generally not for serious builders and rarely produce good products.

“$5,000 prizes don’t fund world-changing companies,” he remarked.

This critique highlights a growing disillusionment with Ethereum’s builder ecosystem strategy. While hackathons have proliferated, few tangible, widely adopted products have emerged.

In contrast, Solana’s ecosystem has shifted focus toward structured startup support, helping the Solana network gain ground as the preferred home for emerging Web3 founders.

“Latest data of startups applying to Alliance: Solana and Ethereum are now neck and neck. However, momentum favors Solana, and it looks like soon Solana will become the largest ecosystem of founders for the first time,” noted QwQiao, customer support at Alliance DAO.

QwQiao also shared a chart showing startup applications to an alliance with Solana at approximately 35%. Meanwhile, those applying to a coalition with Ethereum stood at approximately 30%.

Startups’ applications for an alliance with Solana vs Ethereum. Source: QwQiao on X

The chart shows a notable shift from 2021, when Ethereum dominated at approximately 50% and Solana was under 10%.

The timing of these concerns coincides with Solana recently surpassing Ethereum in staking market cap. Notably, this is a key metric reflecting network value and user confidence. Therefore, the turnout reinforces its growing dominance among investors and builders.

Beyond a technical standpoint, this shift signals a changing perception of where future innovation and economic opportunity may lie in crypto.

Proposals For Structural Solutions Within Ethereum

This trend for Ethereum comes amid a broader narrative crisis. After being hailed as the world computer, Ethereum is now positioned as a deflationary store of value. Its identity has also become muddled.

Critics argue it lacks a cohesive story to galvanize community and institutional support. This is especially true compared to Solana’s emphasis on speed, usability, and mobile-first design.

Against this backdrop, Franek proposes urgent and structural solutions, calling for increased funding for accelerators, incubators, and ecosystem venture funds.

This means moving capital away from abstract research and repurposing it toward tangible product development.

He also points to composability issues in Ethereum’s Layer 2 solutions and the need to scale the base Layer-1 (L1) more aggressively. Without fixing these frictions, he warns, Ethereum will struggle to compete.

“…decades of evidence from Web2 apps tell us that users hate friction. UI and onboarding have to be stupidly simple. 99 times out of 100, a user will choose the app of least resistance,” Franek added.

Ethereum’s ability to reinvent its builder engagement strategy is critical to retaining its relevance amid a new wave of developer preferences and technological priorities.

Ethereum and Solana Price Performance. Source: TradingView

ETH was trading for $1,824.19 as of this writing, with a modest 0.5% surge in the last 24 hours. Meanwhile, SOL traded for $149.38, down by 0.74% in the same timeframe.