Ethereum was the first blockchain to fully implement smart contract support. This led togrowth of its popularity and gave impetus to the developmentsuch sectors of the crypto economy as decentralized finance (DeFi) and non-fungible tokens (NFT). A year ago, Ethereum was an absolute with a 97% share of the volume of blocked funds in DeFi, while now its share has decreased to 62%.
Image source: defillama.com
Along with the growing demand camesignificant load on the network, for which Ethereum was not ready. To ensure security and maximum decentralization, the blockchain was built on the proof-of-work protocol, the reverse side of which was low bandwidth. Ethereum cannot process more than 20 transactions per second (TPS), which forces users to pay higher fees to be included in a block. Competition between users has led to record commissions that often exceed $50.
Image source: bitinfocharts.com
The low speed and high costs of Ethereum gavepush for the development of faster blockchains. One of the promising ones is Solana, which at speeds above 50,000 TPS charges a fee of less than a cent. Solana is based on a proof-of-stake protocol and has a lower degree of stability and decentralization than Ethereum. However, this did not stop Bank of America from calling it "the potential VISA of the digital ecosystem."
Thus, in the last financial year, VISA processed165 billion transactions, during the same time Solana - over 50 billion. Solana entered the NFT market only in August, but now there are over 6 million digital objects based on it.
Image Source: Cryptocurrency ExchangeStormGain
Solana is a young project that continuesfight childhood illnesses. Last year, the network fell several times due to ddos attacks on one of the decentralized exchanges, and Solana Labs management did not immediately recognize the problem. Solana’s ability to continue to take market share from Ethereum depends largely on the ability of developers to resolve complications in a short time.
Analytical group StormGain
(platform for trading, exchanging and storing cryptocurrency)
Read this:
Solana breaks into the TOP-5 in terms of capitalization
Ethereum "killer" has grown 100 times in a year and got into the Bloomberg terminal
Solana entered TOP-8
Why buying Ethereum is more promising than Solana at this stage
BofA: cryptocurrencies on the cusp of recognition, adoption and growth
"Killer" Ethereum grew by 53% in a week