The crypto market has witnessed the rise and demise of many crypto assets over the course of time, but very few have managed to reach a high enough level of popularity for people to remember and regard them as viable investments, let alone gain a resounding nickname like the Ethereum killer. Solana (SOL) has earned such a reputation, becoming one of the most prominent digital currencies available and one of Ethereum’s main challengers.
However, despite its foreboding moniker, Solana hasn’t caused Ethereum’s downfall or that of any other crypto. The name carries a lot of promise, but so far, the prediction hasn’t come true and might never happen. Ethereum is still alive and thriving, holding the second position in the crypto market, with a trading price of $3,315 at press time and prospects of significant growth in the upcoming months, while the Solana price USD is far behind at only $184.
Judging by these figures, there’s not much chance Solana could vanquish the altcoin forerunner and steal its spot, at least not in the foreseeable future. This apparent contradiction raises questions about the origins of the Ethereum-killer label and whether it is justified or not.
Solana’s Beginnings
Solana is a Layer 1 blockchain solution developed by the tech company Solana Labs, founded in 2018 by a team of former Qualcomm engineers led by software developer Anatoly Yakovenko. Work on the mechanism that supports Solana began one year earlier, during the initial coin offering (ICO) boom, while the mainnet was officially launched in 2020.
Solana was born out of its creators’ desire to develop a product that could address the infamous blockchain trilemma, a concept theorized by Ethereum’s co-founder Vitalik Buterin, referring to the challenge of devising a blockchain solution that could simultaneously check the boxes for decentralization, security, and scalability. Buterin recognizes that engineers struggle to achieve and maintain a balance between all three aspects because of their inverse correlation, where enhancements in one area cause shortcomings in one of the other two, prompting developers to make compromises.
Therefore, the project started with a bold vision of creating a high speed blockchain platform that could deliver superior throughput and security, while also maintaining transaction costs low and ensuring efficient scalability.
Is Solana A Threat To Ethereum?
Solana is certainly not the only promising crypto in the market, so how did it come to be dubbed the Ethereum killer? It all boils down to the parallels that people often draw between Solana and Ethereum, highlighting their similarities as well as their differences.
It was obvious from the very beginning that Solana resembles Ethereum in many ways, both being decentralized blockchain networks that boast smart contract capabilities, which makes them highly appealing for developers looking to create decentralized applications (dApps). Each of them has a native token, SOL and ETH, which are used to power operations on their respective networks. So, in a way, they address the same audiences and have comparable use cases. But even if their direction is similar, they take different paths to achieving their goals.
Looking at the two platforms’ infrastructure and the experience they provide, it also becomes clear that Solana has several advantages over Ethereum. For starters, Solana employs a unique method to achieve consensus and validate transactions by combining proof-of-history (PoH) and proof-of-stake (PoS) protocols. This allows Solana to streamline operations and process up to 65,000 transactions per second (TPS) in theory (in practice, the network handles between 3,000 to 4,000 on average), making it one of the fastest blockchains available.
By comparison, Ethereum is based on a PoS system and has a much more limited transaction throughput of around 15 to 30 TPS on its mainnet, although the integration of Layer 2 scaling solutions has enabled faster transactions, enhancing its processing capacity considerably.
Another area where Solana seems to have the upper hand is transaction fees.
Even during periods of high activity, Solana’s economic design guarantees transaction fees are kept low. This affordability makes it a very attractive solution for the deployment of dApps and NFTs.
On the other hand, Ethereum has long been criticized for its volatile fee structure. Gas prices increase significantly, sometimes reaching hundreds of dollars per transaction when demand is high, and the network becomes congested due to the large number of users leveraging its resources. Soaring gas prices become a barrier to entry, making the platform rather expensive and thus ineffective for micro-transactions. The Layer 2 solutions mentioned earlier can reduce some of the load on the mainnet and thus lower fees to some extent, but this is a recurring issue that Ethereum has yet to solve.
It can be concluded that the impressive transaction speeds and reduced fees are Solana’s main selling points and the factors that position it as a strong Ethereum contender or, in other words, a potential Ethereum killer.
However, just because Soalan is superior in certain aspects doesn’t mean it has what it takes to outperform Ethereum. Despite Solana’s remarkable TPS figures, the network experiences issues related to regular power outages and bottlenecks caused by high demand. These problems pose an obstacle to scalability and affect its reliability, an area where Ethereum seems to fare much better.
Furthermore, Ethereum has a more mature and extensive ecosystem than Solana, being the go-to destination for NFT creation. Despite its prohibitive gas fees, developers see Ethereum as a more reliable option due to its track record and prefer to run it project on a tried-and-tested platform.
As for decentralization, a factor that is critical when assessing blockchain systems, Ethereum is the clear winner, having over 800,000 active validators by the latest count, compared to Solana’s 2,000 validators.
Therefore, even if the Solana presents innovative features that set it apart from other networks, Ethereum included, and brings notable improvements to the blockchain and crypto space, Ethereum remains the indisputable leader of the altcoin cohort.
