Ethereum versus Solana: Which Layer 1 captures more value?

ARK Invest researchers compare Ethereum, Solana and Hyperliquid to three American catering companies.

ARK Invest digital assets researcher Lorenzo Valente compared Ethereum, Solana and Hyperliquid with three American catering companies on September 3, arguing that their different operating structures require different valuation frameworks.

Overview

ARK researcher Lorenzo Valente compared Ethereum, Solana and Hyperliquid through three very different restaurant business models. Ethereum uses the Layer 2 network to expand, but overall the settlement fees currently charged are relatively limited. Solana processes applications in an integrated environment, bringing execution costs closer to verifiers and holders. Hyperliquid automatically uses its aid fund mechanism to use most of its eligible transaction fees to purchase HYPE. Valente said that due to significant differences in revenue paths and risks, each architecture requires a separate valuation method.

In an analysis, Valente compared Ethereum to McDonald's, Solana to Chipotle, and Hyperliquid to In-N-Out. These comparisons explore how each blockchain scales, controls its infrastructure, and directs revenue to its native assets.

Valente believes that Ethereum operates in a manner similar to a franchise network because independent second-level teams rely on Ethereum for settlement when building their own systems. Solana is similar to a company-owned chain store in that applications are executed in an integrated environment. Hyperliquid provides a more centralized structure built around its trading platform, consensus system and fee-funded HYPE purchases.

Ethereum is similar to a franchise that charges limited royalties

Ethereum's expansion roadmap allows second-layer networks such as Arbitrum, Base and OP Mainnet to process transactions outside of their main execution layer. These networks regularly submit data or certificates to Ethereum to inherit some of its security and settlement infrastructure. Valente likens the arrangement to McDonald's franchising model: Ethereum provides brands, standards, developer ecosystem and billing layers, while independent teams fund and operate the second-tier network, just as a franchisee funds and manages individual restaurants.

This architecture helps Ethereum scale without having to fund each new execution network. Independent teams can develop specialized products, attract users and try out different technologies while continuing to settle on Ethereum. However, Valente believes that Ethereum benefits too little from the economic activity generated by these networks. Second-tier operators charge transaction fees from users, but mainly pay Ethereum for data availability and settlement fees.

In March 2024, EIP-4844 introduced a separate blob space for Rollup data. Blob reduces the cost of submitting layer-2 data to Ethereum, making transactions for users cheaper. They also reduce the fees Rollup pays to the main network when blob capacity exceeds demand. Valente described this as Ethereum building a successful franchise network but failing to collect enough rent. In his view, Ethereum has valuable settlement infrastructure, but its pricing is too close to operating costs.

This analogy has its limitations. Ethereum does not sign commercial franchise agreements with second-tier operators and cannot impose royalties, control its products, or prevent them from using alternative data availability services. Any proposal to increase the minimum blob fee will require technical review and acceptance through Ethereum's decentralized governance process. As demand and capacity change, Ethereum developers have considered adjusting blob pricing. Raising the fee floor could increase fees paid to Ethereum, but it could also increase second-tier transaction costs or encourage operators to use competitive systems.

Solana keeps more activities in one environment

Valente compares Solana to Chipotle because both follow what he calls a vertically integrated model. Solana handles application activity directly through its underlying network, rather than using external Rollup as the main extension path. Transactions on Jupiter, token issuance, stablecoin transfers, and other application transactions share the same execution environment. Users pay base and priority fees, while verifiers may gain additional value through transaction sorting and Jito tips.

This structure retains more fee streams within the Solana network. Verifiers and their clients are compensated, while part of the base fee is destroyed. As a result, the relationship between network usage and value capture is more direct than when execution occurs on a separate secondary network. Valente likens the arrangement to Chipotle owning and operating its own restaurant: the company controls the customer experience and retains store revenue, but it must also fund expansion and bear the risk of operational failure.

Solana faces a similar trade-off. Its unified architecture provides direct control over execution, fee markets, and performance upgrades, which also means congestion or network outages can simultaneously affect applications across the ecosystem. The network has invested in additional verifier clients, including Firedancer, to improve performance and reduce reliance on a single major software implementation. Solana's Firedancer and Alpenglow upgrades may enhance performance and verifier diversity, but their full effectiveness depends on deployment and carrier adoption.

Valente believes that Solana's integration model retains fees better than Ethereum's Rollup architecture. This assessment depends on the revenue and costs involved. Verifier rewards involve token issuance, and application fees are not automatically and equally credited to each SOL holder.

Hyperliquid creates the shortest cost capture chain

Hyperliquid is compared to In-N-Out because it combines a focused product range, internal infrastructure and limited reliance on external capital. Its initial products focused on perpetual futures trading through on-chain order books. The platform builds its own consensus system, HyperBFT, and operates its trading infrastructure through HyperCore. It then added HyperEVM for universal smart contract applications, but derivatives remain a major source of activity and revenue.

Valente believes that Hyperliquid has the shortest value capture path among the three networks. Under transaction fee inflow agreements, aid funds use most of their eligible income to purchase HYPE from the market. This model is different from traditional corporate share buybacks. HYPE is a cryptocurrency token rather than equity, and holding it does not confer the same legal rights as holding company shares. However, when trading activities generate sufficient fees, the purchase of aid funds can still create duplicate market demand.

Hyperliquid's aid fund uses most of the agreement transaction fees to purchase HYPE. Based on available agreements and market data, the fund has spent more than $1.3 billion on such purchases since the mechanism was launched. Recent research found that during 2026, Hyperliquid and Pump.fun accounted for almost 90% of total tracked cryptocurrency token repurchases. These figures measure purchasing behavior during the period under review and should not be interpreted as a guarantee of future demand.

Hyperliquid is also extended with HIP-3 to allow approved builders to deploy sustainable markets while leveraging their underlying infrastructure. Official documents show that spot and HIP-3 deployers can retain up to 50% of the costs incurred by their deployed assets. Valente likened the arrangement to a restaurant operator with strict control of operations, allowing external builders to introduce products without giving up their infrastructure or customer relationships.

Different models generate different concentrated risks

Under Valente's analysis framework, Ethereum's main advantage lies in distribution. Independent second-level teams provide external capital, engineering capabilities and access to large companies. The price is weak control over users, executive revenue, and these online behaviors.

Solana keeps more activities within one system. This can enhance expense capture and product coordination, but the network must support a broader technical perspective and bear system-wide operational risks.

Hyperliquid provides the most direct relationship between product revenue and token purchases. At the same time, it carries the largest concentration risk of the three models because its activities, leadership and revenue are still closely linked to a trading ecosystem. Valente warned that builders, who account for a large proportion of transaction volume in HIP-3, may eventually seek better fee terms. Revenue may also weaken during a prolonged downturn in derivatives activity.

This comparison does not determine which token will be better. Valuations also depend on circulation, liquidity, governance, competition, regulation and the product needs operating on each network. Unverified market fluctuations can be directly attributed to Valente's article. ETH, SOL and HYPE continue to trade and respond to broader cryptocurrency prices, leverage, agreement activity and macroeconomic conditions.

Future Outlook

Ethereum's discussion of value capture will focus in part on Blob demand and pricing. Developers can adjust capacity or cost parameters, but changes require testing and community support. Higher settlement revenue needs to be balanced against affordable tier 2 trading.

Solana's model will be tested by network upgrades, verifier client diversity, and its ability to support higher activity without repeated congestion. The expansion of institutional products and consumer applications may also change their fee composition.

For Hyperliquid, the adoption of HIP-3 will show whether the network can expand beyond the markets it develops internally while retaining its revenue share. Trading volume and aid fund purchases will remain important indicators of the model's durability.

Valente's core argument is that investors should not use the same metrics to evaluate every first-level network. Ethereum emphasizes external ecosystem expansion, Solana emphasizes unified execution, and Hyperliquid emphasizes direct product revenue. He said that each model may succeed, but each model also faces different failure paths.