The digital assets sector has been around for more than a decade and is now worth more than most major economies. This $2 trillion industry has plenty of space for new projects and networks, but also plenty of competition for new entrants.
The most popular assets – Bitcoin and Ethereum – have cemented their lead. To challenge their dominance, new platforms need unique features and a completely reimagined framework. That’s what Solana – an Ethereum rival – seeks to offer.
Here are three ways the Solana network sets itself apart and why these unique features have been attracting more users and developers away from Ethereum in recent years.
Built for scale
Built by former Qualcomm and Dropbox employee Anatoly Yakovenko, Solana was meant to be scalable by default. Legacy blockchains like Ethereum have suffered bottlenecks due to their proof-of-work protocols, which has compelled them to move some network traffic off-chain. By comparison, Solana handles multiple times more traffic while staying on the core chain.
While Bitcoin and Ethereum can handle 5 and 15 transactions per second, Solana can handle up to 50,000 per second. The trick lies in Solana’s consensus mechanism, which relies on time stamps (proof-of-history) rather than computer puzzle solving (proof-of-work) to verify transactions.
Innovations on the underlying blockchain also help reduce the Solana network’s fees for transactions. Fees for each transaction could be up to 500 times cheaper than similar actions on the Ethereum network.
At the moment, individual transactions cost as little as 0.000005 SOL, or about $0.001. By comparison, ETH gas fees are 186 gwei or $13.7 on average at the time of writing.
Because it was developed much later, the network has enough capacity and flexibility to support multiple recent blockchain-based projects with ease.
For instance, the Solana network has served as the backend for decentralized exchanges (DEX) such as the Serum Project. Decentralized audio streaming platform Auduis recently migrated to Solana since the network could better handle large audio files. The Solana network now has several non-fungible tokens and DeFi instruments operating on it.
Solana’s flexibility makes it highly compatible with different types of decentralized products and protocols. This also makes the network relatively easy to migrate to and somewhat future-proof.
There’s plenty of demand for smart contracts and decentralized financial products. Ethereum has cemented its position as the core network for these digital assets, but the network’s lack of scale and flexibility has hindered adoption. Solana intends to plug the gap with a faster, cheaper and more adaptable network.
The Solana blockchain works on a different consensus mechanism, can handle multiple times more transactions and is significantly cheaper. Several projects have migrated to this new solution in recent years and many more could follow as Ethereum’s scalability problems persist.