Solana has been described as the next Ethereum killer. In 2021, the price of Solana skyrocketed. Even Celebrities are jumping on the Solana train. Is the the hype around Solana justified? That’s what we will see in this article.
The token of Solana is SOL, it is the 7th biggest marketcap on Coingecko . There are currently about 490M tokens, and you can stake them, without any minimum required. SOL has both inflationary and disinflationary mechanisms, but the combined effect is inflationary.
The founding team of Solana is impressive . Anatoly Yakavenko, the CEO, and other team members have worked at top companies like Dropbox, Qualcomm, Intel and Google. And Solana raised more than 300M in investment from top investors.
There are currently 350 projects built on Solana, mainly covering DeFi and NFTs. On DeFi Lama you can see the biggest DeFi projects of Solana, with 12B in total value locked One of the biggest project is called Serum. This is a super performant decentralized exchange built by FTX, one of the biggest centralized exchange.
In terms of technology:
- Solana is able to achieve 50,000 transactions per second
- to be compared with 30 transactions per second for Ethereum .
This high throughput is possible thanks to Proof of History, the consensus algorithm of Solana. Proof of history is a modified version of proof of stake, with an innovative system for time management. With Proof of history, each node in the network can determine the correct time independently from other nodes. This allows Solana nodes to order blocks without communicating between each other, which saves a lot of time.
However the network is less decentralized than Ethereum, with only 1000 validators, compared to more 3600 for Ethereum 1, and more than 200,000 for Ethereum 2.0 .
On Solana, like for Ethereum you can build decentralized applications and smart contracts. Solana smart contracts are written with low-level languages like Rust, C and C++. These languages are harder to master, and relatively few developers know them, which is going to slow down the growth of the developer community.
In conclusion, is Solana the next Ethereum killer? Although Solana is more scalable than Ethereum, it has some signifiant issues :
- the tech is not as battle test as Ethereum, as we saw during the 24h outage of the network. * it’s not as decentralized as Ethereum
- and the development tools are way behind Ethereum .
Solana is interesting, but It’s too soon to say if Solana is going to be better than Ethereum. At the moment, I would just recommend to keep an eye on it.