The demand for digital tokens with utility has increased tremendously. As a result, these tokens have experienced a prodigious percentage growth of Solana and Avalanche compared to pioneer cryptocurrencies like Bitcoin. Solana, on one hand, is among “Ethereum killers” digital currencies.
On the other hand, Avalanche is akin to an enhanced version of Ethereum. Remember, Ethereum is the biggest cryptocurrency with utility. However, it has faced slow processing speed and high gas fees. This has necessitated developers and crypto investors to look for better platforms, and Ethereum and Avalanche prove great alternatives.
Why Solana and Avalanche
The crypto bull run has lost steam. With no news event to support this correction, it is possible investors are booking from the bullish move. But all is not lost. This retracement provides investors with an opportunity to buy low.
Solana and avalanche should be top of your list when choosing cryptos to invest in. But which between the two should you choose or invest in first? This article shall compare how the two crypto coins compete. After this article, making an informed choice will be a breeze. But let’s understand what Solana and Avalanche are.
About Avalanche
Avalanche is a smart contract platform for decentralized apps. Like Ethereum, the blockchain network is designed to accommodate Defi, NFTs, stablecoins, and other applications. Also, it uses Solidity, an Ethereum programming language, to create custom private or public blockchains referred to as subnets. AVAX is the platform’s native currency and is used to pay transactions fees and enhance the network’s security. The coin can potentially help to vote on network upgrades. The most recent long-term Avalanche predictions expect roughly a 15% price increase every year.
The platform is made up of three blockchain components.
- P Platform – Where the coordination of validators and subnets creation occurs.
- X Chain – Handles management and exchange of crypto assets
- C Chain – Coordinates create smart contracts
The blockchain network prides itself as a proof of stake protocol with the highest number of validators. It is also among the fastest blockchain platforms. Deployment of smart contracts is tenfolds cheaper than deploying on Ethereum blockchain. It also enables you to create and share digital arts and mine the digital collectible for less than a cent.
The blockchain network enables developers to launch blockchains with application-specific features thanks to the avalanche virtual machines (AVMs). It is also designed with an Avalanche Bridge feature for blockchain interoperability, enabling you to transfer assets between Avalanche and other blockchains. It also supports decentralized finance (Defi) apps ranging from decentralized exchanges, assets issuance and trading, borrowing and lending, and automated market makers.
About Solana
The Bank of America assertion that Solana is the visa of digital assets is probably the best picture of what could become of this Ethereum killer. The Solan platform has handled over 50 billion transactions, slightly more than a third of VISA, the world’s global payment giant. The total value locked in the Solana platform has hit $11 billion and has minted more than $5.5 billion worth of Non-Fungible tokens.
The major focus is scalability and hence offers user-friendly apps. It is one of the fastest-growing crypto ecosystems, with over 400 projects spread across Web3, NFTs, and Defi. Recently, Avalanche announced a Wormhole project that will bridge Solan with other projects. It was one of the projects that led to a sustained rally.
But Solana has experienced an outage in September. With Avalanche seeking to fill this gap. In fact, Avalanche has lined up several upgrades, such as AlphaX and Homora V2. The latter has 31 frame pools and will offer two-time rewards, while AlphaX will enable investors to trade smart contacts permissionless and benefit from the perpetual swap market.
Similarities Between Solana and Avalanche
Solana and Avalanche share a lot in common. For instance, they were created in 2020 and aimed to overtake Ethereum by increasing scalability and enhancing the smart contract sector. Some Analysts argue that capital is rotating between Solana and avalanche. Here are the top similarities between Solana and Avalanche.
Scalability
The two blockchain networks bring decentralizations to the global stage without congestion. This allows the two platforms to process more transactions per second than Bitcoin and Ethereum.
Multi-Use
Unlike Bitcoin, Avalanche and Solana are designed with numerous use cases. Users can perform peer-to-peer transactions, enhance network security through staking, participate in governance and pay for gas fees and other transactions with SOL and AVAX (native virtual currencies of Solana and Avalanche, respectively).
Open-source
Both avalanches and Solana are open-source platforms for creating dApps. This means they are produced collaboratively, transparently published, shared freely, and produced for community good.
Finite Supply
While some cryptocurrencies have an infinite supply, Avalanche has a cap of 720 million coins, while Solana’s maximum supply is 489 million. The advantage of having a finite supply is that the price is bound to increase as the demand rises and the supply remains flat.
Difference Between Solana and Avalanche
Market Value
Solana has a higher market capitalization than Avalanche. Avalanche is currently trading at $90.61and has a market capitalization of $22,136,718,299 with a circulation supply of 244,353,694.15. The total supply is 395,891,290. It started trading at $3.4 before rising significantly to a high of $145. Representing 4800%. According to Ycharts, the digital coin has changed 872% over the last year.
On the other hand, Solana was one of the best performing cryptocurrencies in 2021, surging almost 11000%. It is now trading at $145.43 and has a market capitalization of $45,668,146,887. There are 314,010,931.45 SOL coins in circulation. Solana has a 24-hour trading volume which is almost three times that of Solana ($634,148,065 24 hour volume).
Interoperability
One of the biggest advantages of avalanche over Solana is the interoperability feature. Initially, individuals would have to work with blockchains that are not tailored for their needs. Avalanche has subnets and individual blockchains that share the networks’ compatibility, speed, and security. Avalanche users can share tokens and communicate with three blockchains. Solana, on the other hand, is not interoperable.
Consensus
AVAX uses the DAG protocol for consensus. On the other hand, Solana uses a hybrid consensus mechanism that combines proof of history and proof of stake.
Speed
Avalanche has a speed of 4500 TPS. On the other hand, Solana claims it can handle 50000-60000 transactions per second, ten times faster than Avalanches. But in actuality, Solana can average about 2000 transactions per second.
Blockchain
As mentioned, avalanche commingles three different blockchains to carry out its tasks while solan consists of only one blockchain.
Locked Value
Avalanche has accelerated the adoption of the users and developers in the NFT, Defi, and gaming spaces. The total value of a locked value in the Avalanche platform sits around $11.41 billion, according to Defillama. Avalanche has overtaken Solana Assets staked on the Defi apps on solan network is around %9.72.
Conclusion
Avalanche and Solana have a lot in common. The two platforms are highly scalable and seek to capitalize on the weaknesses of the Ethereum platform. For instance, transactions on both platforms are quite high, running a thousand transactions per second and dwarfing Ethereum’s 15 TPS. Solana has enjoyed more demand and adoption, which has propelled its value with a market cap twice that of Avalanche.
However, Avalanche seems to have much potential. It comes with an interoperability feature, a hot cake in the world of blockchains. For this reason, the locked value of Defi projects is more than that of Solana. Could AVAX overtake Solana in 2022? It surely can!