In 2021, Solana sprang to prominence as one of the leading cryptocurrencies, reaching an astounding 3,700% at its peak before battling through market-wide fluctuations. The promise of unmatched utility, which directly threatened Ethereum’s blockchain network, which has long been the preferred location for developers to introduce decentralized finance (Defi) projects and services, was at the heart of Solana’s well-documented rise to fame.
But is there a chance that Solana may surpass Ethereum to become the leading DApp blockchain? Yes, potentially, and here are the justifications.
Let’s consider the price difference between Solana and Ethereum
Solana and Ethereum both saw severe corrections in 2022, with SOL experiencing a 95% retracement and ETH experiencing a 75% retracement from their respective all-time highs. According to certain notable data, SOL’s sharper decline is due in large part to the rate at which its price grew in 2021. With the help of numerous powerful supporters, SOL rose from $1.54 on December 31, 2020, to a high of $259.96 by November 4, 2021, a spectacular rally by all accounts.
The highly functional blockchain of Solana, which has made the network a wonderful place for the exchange of NFTs as well as hosting other top-notch Dapps, is at the heart of the high levels of investor interest in SOL.
This degree of utility has led to However, is Solana really an “Ethereum killer” as some pundits have claimed? Let’s examine the reasons Solana might surpass Ethereum as the leading NFT.
Solana’s Potential to Surpass Ethereum
Solana, a blockchain platform that was first introduced in early 2020 by two ex-Qualcomm engineers, provides a quick and affordable environment that is ideal for numerous Defi platforms and Dapps, including NFT marketplaces.
Solana has a “Proof-of-History” consensus that, importantly, establishes the order of transactions. Proof-of-history can give developers and validators additional security and freedom to produce speedier transactions than relying on validators to confirm transaction times.
Furthermore, Solana makes use of Cloudbreak as a distributed archive to stop transaction history from hogging a lot of processing power and sluggish the network.
Solana was constructed with speedier cryptocurrency ecosystem growth than Ethereum is capable of, not as a store of value like Bitcoin, but rather with usefulness in mind. Will this, however, be sufficient to end Ethereum’s hegemony in the Defi market?
1). revolutionary consensus on historical proof
As we’ve already mentioned, Solana’s Proof-of-History consensus is state-of-the-art in the world of cryptocurrencies, and the strategy has gained the network a lot of supporters from all corners of the ecosystem.
This is so that transactions can be validated in the order that they have been received by many programmable blockchains, like Ethereum, which rely on third-party applications to add a “median” timestamp to transactions.
Although there are still serious concerns about SOL’s own decentralized structure, Solana contends that this introduces unneeded layers of centralization in a system that is meant to be completely decentralized. Solana may add these timestamps to the blockchain itself via a flexible delay mechanism thanks to the ground-breaking Proof-of-History consensus (VDF).
“Every block maker is required to cycle through the VDF, Co-founder of Solana Labs Anatoly Yakovenko notes that this method “gives the ledger this intriguing quality where you can infer when events occurred when you inspect it.” arrive to their allotted slot and produce a block.
2). Very Low Transaction Fees
With regard to Ethereum’s gas-hungry nature, processing transactions on its crowded network necessitates high fees that can go up to and beyond $100 per transaction. A single NFT purchase might also cost consumers up to $250 just to complete the transaction. A transaction’s cost increases with complexity on the Ethereum network.
The price of Ethereum gas has decreased as the cryptocurrency market matured in 2022 and Ethereum 2.0 was released. The ultra-low costs of Solana, with an average cost-per-transaction of $0.00025, are still far away from them.
These very small fees enable NFT collectors to purchase the artworks and collectibles they desire without incurring financial loss by supporting the transaction itself.
3). Quick Transactions
The lack of a delay between processing a transaction and its confirmation on the blockchain is one of Solana’s main benefits over Ethereum. Solana transactions can be accepted nearly instantaneously, but Ethereum transactions often take four minutes or more to be approved.
Solana’s efficiency is even more appealing than that of its predecessor because transactions are processed faster and more sustainably than Ethereum’s gas-hungry blockchain.
Faster transaction times and more responsive marketplaces have attracted both NFT creators and buyers, and this has been a major factor in Solana’s first-ever overtake of Ethereum in terms of NFT trading volume in May 2022.
4). Solana is gaining ground on Ethereum.
The enormous amount of momentum created by the network and its native money, SOL, is another important aspect supporting Solana’s case for surpassing Ethereum.
Between August 1 and September 7 of 2020, five weeks after the debut of Solana, SOL increased by about 428.32%. By the time it reached its peak in November 2021, Solana had a market cap of $63 billion, solidifying its place among the top 10 cryptocurrencies by market cap.
This ascent to fame has been a clear demonstration of confidence in Solana’s core technical foundation. Although SOL has underperformed amid broader market downturns, momentum during the following bull market may once again flow to Solana rather than remaining with longtime favorites like Ethereum.
Should Ethereum Be Replaced by Solana’s NFTs?
There are undoubtedly some warnings to counter for Solana, as its network has been exposed to security lapses and fresh competitors keep surfacing as potential competitors. But the pragmatism of its blockchain is seldom in question.
Even while Ethereum remains the main attraction of Defi at the moment, significant cryptocurrency market crashes and crypto winters like the one we’re currently experiencing can give rise to fresh and deserving ventures. We might witness a new era of Solana supremacy in 2023 and beyond, should the NFT landscape use the downturn to reevaluate their allegiances to Ethereum.