The Ether ecosystem has recently become a significant source of rising coin prices due to the explosive growth of the DeFi and NFT sectors. However, since November 2021, the altcoin has no visible competitors, and many potential “ETH killers” have not been in competition and have fallen out of competition for the decentralized financial sector. Despite this, the Solana coin can compete with ether due to the speed and price of transactions and the good pace of blockchain development.
Solana coin is getting serious
All these processes take place against the background of the formation of ETH as a full-fledged second force in the cryptocurrency market. Following the status, the leading altcoin loses many of the benefits of its previous position, such as low transactions and network availability for all categories of users. Theoretically, this means that part of the ETH 1.0 audience will be looking for an alternative, and an excellent way out of this situation would be to move to SOL. But first, let’s think about what has become less accessible than before.
A clear example of the growth of the ETH network was a statement by the director of BlockFi, who announced that the company would no longer provide services for the free selection of the leading altcoin. The reason for this decision is significantly increased transaction costs. In other words, the fees in the Ethereum network skyrocketed, and even the London update failed to solve the problem. For the first withdrawal from the platform, you will have to pay a commission of 0.015 ETH, which is 64 USD. A similar situation occurs on many decentralized ether-based platforms.
Ultimately, this will lead to an outflow of ETH-based projects and the search for more profitable alternatives. Developers will follow the audience’s preferences, and the leading altcoin will likely lose some of its investors. I immediately note that there is no need to worry because the increased deflationary component of the coin will allow it to attract much more institutional investment.
Altcoin Solana can become an effective alternative to ETH because it consumes a minimum of energy, and therefore the network charges are much lower. An illustrative example was provided by the project developers, according to which one transaction on the altcoin network consumes less energy than two searches on Google.
For example, ETH currently consumes 644 million joules, while SOL is only 1,836 joules. The situation is likely to change with the transition to ETH 2.0, but Solana’s competitiveness is staggering, and since November 2021, this altcoin has been a viable alternative to ETH.
To make matters worse, the Solana project architecture allows smart contracts to process many more transactions in a shorter time frame and at a lower cost. Shortly, we can expect a change in the ratio of the number of projects and the price of blocked funds in DeFi projects based on ETH and SOL.
In analyzing the possibility of such a trend, it is worth emphasizing that Solana can outperform ether as ether outperformed bitcoin in terms of growth. Technically, the coin’s potential is by no means lower than ETH Growth so that Solana can surpass ether. Technically, the possibility of the coin is in no way inferior to ETH.