Two of the largest blockchains for defi and nfts are ethereum and solana. both networks have extensive ecosystems and individual characteristics that make them attractive. but how exactly do you compare solana to ethereum? solana has been considered the “ethereum killer” within the crypto communities. but is that really true? is solana better than ethereum?
This article will discuss the main differences between the two blockchains. We’ll look at the underlying technology and main functions of each blockchain, as well as the expanding dapp ecosystem.
Reading: Solana vs ethereum
what is ethereum?
Ethereum is the first programmable blockchain, which enables developers to build decentralized applications using its general-purpose smart contracts feature.
The ethereum blockchain can also be used for non-fungible tokens (nfts) and decentralized finance (defi) applications. Ethereum was created with the intention of being everything to everyone and serving a wide range of specialized applications. and that is precisely what it does. offers security and a complete set of tools to build any decentralized application.
The native asset of the blockchain is ether (eth), and it is also used to pay gas fees for transactions. however, ethereum is currently undergoing a proof-of-stake (pos) transition, which will bring several benefits to the network, including lower costs.
what is solana?
Solana was created to solve the scaling challenges faced by the Ethereum blockchain. This is due to the increasing interest in crypto and the bandwidth limitations that limit transaction throughput for anyone who wants to use a particular blockchain. Solana uses clever technical tricks to find convincing solutions to problems that are not being solved by other blockchain platforms.
Like Ethereum, Solana provides a platform for non-fungible tokens and decentralized applications (dapps). These digital versions of collectibles such as artwork have created a lot of excitement among digital artists such as 3D modelers and VFX artists. one of solana’s first ventures in this direction was the degenerate apes. this collection contains over 10,000 portraits that can only be purchased in sol. this can have a significant impact on the value of the coin: degenerate apes trade in the tens of millions.
solana vs ethereum: what are the differences?
Both blockchains have their fans and tons of applications already running on them. however, ethereum is the most popular because it offers a more transparent and sophisticated dapp ecosystem. there are certain differences that cannot be overlooked between the two. we will examine the differences between these blockchains from ten different perspectives.
Ethereum 1.0 relies on a PoW consensus mechanism, which is the same mechanism used by Bitcoin’s blockchain. This means that the network is protected by miners, who use their computational power to validate blockchain transactions and generate new blocks. This is the essence of the decentralized network, and it serves to increase the security of the network. However, the PoW mechanism can only process a few transactions per second, which is a huge impediment to a growing decentralized network.
solana differs from ethereum in that it uses proof of history (poh). in essence, it requires a series of computational steps to determine the cryptographic time between two events. you can track the order of each transaction by adding timestamps and adding them to transactions. this sequence of commands is fundamentally different from that of bitcoin or ethereum, where transactions are not made in a timely manner.
another essential difference between ethereum and solana is their “stateless” architecture. this helps reduce memory consumption. Because the state of the entire network does not need to be updated for each transaction, transactions can be performed sequentially. this makes solana extremely scalable.
2. programming language
Developers can create programs using smart contracts that run on decentralized blockchain networks. Each node on the network hosts its own virtual machine that executes instructions as they are added to the digital ledger.
Smart contract security is affected by the programming languages a smart contract platform supports and the virtual machines it uses.
Of course, the programming language used is important as developers who are more familiar with it will be less likely to make mistakes. this means that an older virtual machine may be more stable and less buggy than a newer one.
ethereum uses the custom ethereum virtual machine (evm). their smart contracts are mostly written in custom languages like:
- solidity (inspired by c++)
- viper (pythonic language)
- yul/yul+ (intermediate language to evm)
- fe (based in rust and python)
solana, on the other hand, prefers to use more well-known languages such as c, c++ and rust.
solana’s architecture is more complicated and supports multi-threading. it also uses the gulf stream transaction forwarding mechanism to run its programs instead of mempools.
details of solidity, the programming language used by ethereum, can create many vulnerabilities in ethereum smart contracts when used by inexperienced developers. although solana uses more familiar programming languages, the complex architecture can present security risks when the code is not thoroughly audited by experienced programmers.
Decentralization stands at the core of blockchain technology. And it is one of the main differentiators when comparing Solana with Ethereum. The ultimate goal is to eliminate systems in which an individual or group has significant control over them. This helps to prevent abuse of power and improves resilience.
However, decentralization can also pose a challenge in blockchain systems. pow networks paved the way for mining pools, which created an environment where multiple pools could have centralized control over the blockchain.
pos, on the other hand, is a system where the biggest stakeholders also get the biggest rewards. This “rich get richer” design may allow centralization of power.
solana is more centralized than ethereum. Solana’s top 30 validators hold more than 35% of the total stake. the best validators have thousands of soles staked and control a significant percentage of the network.
4. idle times
Ethereum is the first programmable blockchain network and most of its flaws have been sorted out since its inception. Although it can sometimes get congested, it is never down because it is significantly more decentralized than other chains. It’s actually part of the reason Ethereum has struggled to scale. The project wants every crypto user to be capable of running an Ethereum node on any hardware. Since its inception, Ethereum has never been down.
solana, however, is still struggling with some of the challenges of creating a truly decentralized network. The chain has experienced several downtimes since its inception.
the first blackout in solana took place in december. 2020. lasted five hours and no funds were lost. the second blackout in solana took place on sep. 2021. lasted 17 hours. this downtime was caused by a ddos (distributed denial of service) attack.
A ddos attack is when a malicious actor attempts to overwhelm a network. which it was the result? solana was paralyzed for several hours and lost some of its investors, but no funds were lost.
However, the network experienced a third shutdown that was not the result of an attack. In January 2022, swarms of bots overloaded the network during an initial dex offering. the network reportedly reached a peak of 400,000 tps (transactions per second). while this downtime is alarming, the fact that solana can handle up to 400,000 tpsis impressive.
5. transaction cost
This is crucial as many people hate to pay transaction fees. Solana is well-known for its low transaction fees. Ethereum has a higher transaction cost than Solana.
As of July 2022, the average gas fee on the ethereum network is 3 gwei (0.09 usd). solana gas fees are 0.0000053 soles ($0.0000014) per transaction.
the solana blockchain has a block time of 0.4 seconds and a block size of 20,000 transactions, compared to ethereum’s block time of 13 seconds and a block size of only 70 transactions .
6. transaction speed
Solana is actually one of the fastest blockchains when it comes to processing transactions. This is due to the network architecture. Ethereum prioritized decentralization, while Solana was more focused on throughput.
ethereum 1.0 can handle up to 30 tps. in contrast, solana can process more than 50,000 tps. visa, the global payment processor, can handle 65,000 tps.
Note that after a few updates, the ethereum network should be able to process 100,000 tps.
7. network size
Ethereum is the largest network that supports smart contracts. According to DeFi Llama, Ethereum’s TVL (Total Value Locked) is up to $53.21 billion, while Solana’s TVL is only at $2.54 billion. The difference between the two networks is more than 95% when it comes to TVL. This means that most financial apps prefer Ethereum. Solana is barely starting to receive support from financial institutions, and it might take a while to catch up to Ethereum’s colossal network size.
8. market cap
Both Ethereum and Solana have their own native coins that are used for paying the transaction fees. These are some of the two most important coins in the entire crypto market.
As of July 2022, 1 eth is $1465 and ethereum’s market capitalization is $178.4 billion, with over 121.7 million eth coins in circulation. ether ranks as the second cryptocurrency, just below bitcoin.
the solana network also does not have a fixed maximum supply of sun. however, it has a fixed inflation rate, which decreases over time, since it tends to reach 1.5% in the long term. As of July 2022, 1 sol is equivalent to $36.33, 345.89 million soles in circulation. this makes solana’s market capitalization $12.57 billion.
9. ecosystem defi
Given the age of Ethereum, it has a much larger and more diverse DeFi ecosystem than Solana. However, Solana is trying hard to attract more developers to the network by launching a variety of marketing strategies such as hackathons and bug-bounty programs. Since its inception, these tactics have helped to increase the number of users and developers.
ethereum is the mainnet for some of the most used defi applications such as makerdao, lido, uniswap and aave. Furthermore, 2021 brought a new trend to the blockchain world, which is the nft craze. The most popular nft markets are based on ethereum.
It is important to point out that the solana defi ecosystem is still in its infancy. however, there are several solana dapps that are starting to attract new users. this is due to extensive hackathons. Some of the safer applications of Solana are Solend and Raydium.
Because blockchain is still a new technology, the ecosystem is still developing. there is a strange correlation between solana and ethereum: every time ethereum gas fees increase, solana users seem to increase.
While no one can predict the future, we can say that the current ethereum defi ecosystem is more extensive and offers a wider range of applications.
Although Ethereum wasn’t the first to use non-fungible tokens to create NFTs (Non-Fungible Tokens), it was one of the most important protocols to promote them. Although the trading of NFTs exploded in 2021, NFTs have been used far long before that.
cryptokitties was one of the first blockchain applications to have nfts. became media-worthy when the app caused major congestion on ethereum in 2017.
although solana is new to the nft table, she is catching up quickly. solana allows buyers to purchase nfts with no transaction fees and few congestion issues. means solana and sol nfts are more easily accessible than ethereum ones.
the price of solana nfts started to rise in the second half of 2021. in sep. 2021, a degenerate ape nft was sold for $1.1 million. This sale marked the first million dollar NFT transaction on the Solana network. a solana jumpsuit sold for $2 million in October. 2021.
solana vs ethereum: which is better?
when comparing solana to ethereum, it is important to identify the exact characteristics or needs of your shares on the blockchain.
If you’re a developer, you’ll be very interested in the underlying technology, which is the main issue when comparing ethereum to solana. Furthermore, each blockchain has its own consensus mechanism and has different ways of scaling. solana is the fastest blockchain, but ethereum has a much higher trading volume and is used more in the cryptocurrency market.
Investors may be more interested in the growth prospects of the two networks. As the decentralized world expands, it can be assumed that both networks will grow in the future. but how much will the growth be and what will be the fate of your coins? this is something worth investigating.
ethereum and solana continue to develop and bring innovative changes. To learn more ethereum and solana from the more experienced, consider joining the beincrypto telegram group. members will be happy to answer all your questions.