Ethereum and Solana used to be direct competitors as SOL was giving ETH a run for its money. SOL bears many similarities to the queen of the market; however, it adds up to ETH’s framework by incorporating newer technologies. This was regarded to be the selling point of SOL and resulted in the success of the cryptocurrency. However, SOL has lost the position it once had within the cryptocurrency market as it was overtaken by Cardano and BNB Coin. Currently, SOL stands at a market rank of #7 but in the light of new developments, can it compete with ETH again?
Ethereum vs. Solana
Ethereum is considered the pioneer of DeFi as its introduced smart contracts serve as the basis of DeFi. However, where the queen benefits from the first-mover advantage, it also suffers from it because its basic architecture may be considered outdated. Enter Solana. SOL is also working in the decentralized finance sphere but it made significant improvements in its scalability through its hybrid consensus mechanism. While ETH uses the less-liked proof-of-work consensus, SOL utilizes the advanced proof-of-stake but in tandem with proof-of-history. This gives SOL its edge and makes it particularly liked by small-scale traders as well as institutional investors.
Why is SOL better than ETH?
JP Morgan released a report which stated that Ethereum is losing market share to Solana in the NFT market. NFTs are considered to be the fastest-growing segment of the NFT market which means that gaining in the segment would prove to be more beneficial for a cryptocurrency than any other segment. Ethereum’s proof-of-work consensus mechanism has been detrimental to the growth of the cryptocurrency. It has resulted in network congestion and high gas fees which made ETH be less attractive to users and paving the way towards SOL.
The ETH 2.0 is geared at solving the dreaded problem of scalability which has put its NFT share as well as DeFi share at risk. Unless the 2.0 upgrade is implemented at a high pace, the queen of the market may lose its position. Solana is faster than Ethereum and may even be regarded better in some aspects but ETH is a mature project that has a stronghold on the market.