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Blockchain platforms are looking to dominate decentralized finance (DeFi), non fungible tokens (NFTs) and smart contracts, all in the quickly evolving cryptocurrency landscape. Among all these, it is no doubt that Solana (SOL) is among the leading contenders to the title of Ethereum killer. Is it another alternative, or does Solana really have what it takes to overthrow Ethereum?
This article will draw a comparison between Solana with Ethereum, taking a look at how fast it is growing, scaling, and how expensive the transaction costs are. Moreover, it will underscore how fast the adoption of the two blockchains is, and most importantly, whether is Solana as good as the hype suggests it might be.
Solana is unique is as it is one of the few projects using the Proof of History (PoH) consensus mechanism on top of the Proof of Stake (PoS). This reduces transaction speed, making it more efficient. While scaling on Ethereum continues to be a challenge, Solana can maintain 65,000 TPS and costs as low as $0.00025 per transaction. The advantage of this tech is that such transactions can be timestamped before nodes validate them.
Solana quickly gained recognition due to its:
Speed: Faster than most blockchains, Solana became the first choice of the DeFi project and NFT marketplace.
Low fees: The low fees that Solana charged were the key reason for developers and users coming to its platform.
Risk Mitigation: Many Web3 projects started migrating to Solana, with numerous Web3 projects such as NFT marketplaces and DeFi apps.
Investors: Andreessen Horowitz (a16z), Alameda Research, and Multicoin Capital helped back Solana with Institutional & Venture Capital Support.
Decentralized applications (dApps) and smart contracts have been the play of blockchain technology on almost all fronts, but Ethereum (ETH) stands as the dominant force behind it. But since transaction fees have been rising and the network has become more congested, challengers have been ushered through the door.
‘The Ethereum Killer’, Solana is currently a source of great strength. However, is the hype real? Let’s see how Solana compares to Ethereum, its pros and cons, and whether it actually has what it takes to knock Ethereum from its perch as the second biggest cryptocurrency.
Among the great advantages that Solana has is scalability. Right now, Ethereum only does 30 TPS, whereas, Solana is able to see 65,000 TPS at peak. For developers and businesses looking for a fast and cheap transaction, this difference is significant. In addition, Solana’s average transaction fee is pennies, per transaction ($0.00025 per transaction) compared to Ethereum’s ever volatile, and high fees, which sometimes can even reach $50 or more per transaction when the network is congested.
Though Solana boasts of impressive speed and low fees, Ethereum still has the monumental lead, thanks to its first move advantage and vast developer community. Ethereum currently has over 3,000 decentralized applications (dApps). Moreover, it is still the go-to platform for DeFi (Decentralised Finance), NFTs (Non Fungible Tokens) and DAOs (Decentralised Autonomous Organisations).
The switch to Ethereum 2.0 has laso seen Ethereum fully adopt PoS as they strive for better scalability and energy efficiency. It’s expected to bring 100,000 TPS capabilities, bridging the gap to Solana. Besides that, Ethereum enjoys great security and decentralization, which is secured by over 800,000 validators. But Etherum is still is in competition with Solana, which has a validator pool of 1,500 validators, and offering more centralisation.
Adding to Ethereum’s power, at least 11 major downtimes occurred in Solana network occurred between 2021 and 2023. The issue of these incidents causes a reliability question mark on such systems for large scale application. On the other hand, Ethereum’s network has been stable, suffering little to no congestion.
Solana has advantages over Ethereum technically, and it needs widespread adoption in order to compete with the leader. Major projects on Solana include: Magic Eden (a large NFT marketplace platform), Raydium (a DeFi liquidity provider), and Serum (a decentralized exchange sponsored by FTX). In addition, Visa and Shopify are just two that have dabbled in Solana’s blockchain for payments, both showing real world utility.
However, in terms of total value locked (TVL — the amount of capital invested in its ecosystem), Ethereum still has it beat. Ethereum boasts $40 billion in TVL, while Solana has just about $2.5 billion as of 2024. This underscores the dominance of Ethereum’s DeFi and institutional trust.
However, Solana’s speed, low fees, and growing adoption, make it a serious competitor. However, labelling Solana as ‘Ethereum Killer’ would be a bit premature. Ethereum has a robust developer community, security and future scalability improvements making it relevant years into the future.
While, Solana is unlikely to replace Ethereum completely. Instead, it may thrive alongside it on a granular scale, focusing on providing low cost and ultra fast transactions for certain use cases.
In reality blockchain space is becoming more about Multi Chain Future where various blockchains lead towards different requirements. It (the Solana network) will not ‘kill’ Ethereum, but it certainly competes with it, propelling the industry towards innovation and efficiency.
Ethereum’s scalability issues are addressed by Solana, a powerful blockchain, to achieve high speed transactions with low fees. Nevertheless, centralization issues and network reliability problems still exist. Ubiquitous ecosystem and security would leave Ethereum ahead, but Solana’s competition pushes for more in the blockchain tech itself. Instead of competing head to head, Solana will likely remain as an important part of the crypto ecosystem on which developers and users can choose from.
