Ethereum is still dominating the NFT market. Pretty much since NFTs started, and all during the 2021 boom. However, the times are changing. There’s competition knocking on the door and the biggest up-and-coming chain for NFTs is Solana. So, which chain is better in general, not only for NFTs?
Solana has some interesting features, but where does Ethereum stand? We are going to have a look at the Solana vs Ethereum discussion.
Is Solana or Ethereum Better for NFTs?
Ethereum is well known for its high gas fees. They can skyrocket when the Ethereum network gets congested. That’s precisely where Solana jumps in and comes to the rescue. Solana tackles exactly these two issues.
When you buy NFTs on Solana, you can expect the following.
- Solana doesn’t charge any transaction fees.
- There’s hardly any congestion at all.
As a result, you can access Solana NFTs a lot easier. It also helps that Solana is fast. This makes Solana currently the second-biggest chain in volume for NFT sales.
Sales for Solana and Ethereum have dropped since last year. However, Solana had a lower sales volume in September 2022 compared to a year ago. But, who doesn’t in this current bear market? $95.4 million, compared to $264 million. Note that the month is not over yet. On the other hand, transactions have increased. From 211,615 to 1.97 million. We see an increase in buyers and sellers, they almost tripled.Â
In the same time frame, Ethereum sales dropped tenfold. See the Ethereum stats on Cryptoslam here. Buyers went down by almost a third, from 164k to 117k. There were 9,000 more sellers, from 118k to 127k. Their number of transactions went from 708k to 533k. Both saw the average sale price come down as well, which is good for us, small buyers! Ethereum went from $3,435.74 to $409.15. Solana went from $1,247.64 to $48.25. See the picture below for the Solana stats:
Source: Cryptoslam
Is Solana Better Than Ethereum?
It depends partly on which criteria you look at. So, let’s have a look at some criteria. This way you can see which ones work best for you.
- Transaction fees
The average transaction on Ethereum is around 5-7 Gwei. That is what Etherscan tells us. See the picture below. An average OpenSea transaction should be approximately $0.46. From personal experience, $0.76 was the lowest and the highest was about $9 during last week. On the other hand, Solscan tells us that the total transaction fees in 24 hours are 65 SOL. That’s around $2,100. In an hour, they complete about 3,200 transactions or 768k per day. So, an SOL transaction is around $0.0027.
- Transaction speed
Solana can handle up to 50,000TPS. They even handled 400,000TPS one time. However, that is when their network went down as well. Still, they could handle it for a while. On the other hand, Ethereum can handle 30TPS. Although, Vitalik expects Ethereum to handle 100,000TPS. That is after they complete all updates.
So, looking at two important features, Solana wins them hands down. However, Ethereum is safer. They also never had any downtime since it started running, and they are more decentralized.
Source: Etherscan
The Differences Between Solana vs Ethereum
We can look at 6 different features and compare the differences between the two chains. We already looked at NFTs, transaction costs, and speed.
1. Consensus Mechanism
Ethereum just changed from PoW to PoS. Solana uses a Proof-of-History mechanism. This is a variation of PoS. The ETH block times went down from 15 to 12 seconds after The Merge. Solana has a 1-second block time.
Solana has a stateless architecture. This means that not the entire network needs to update after each transaction. As a result, Solana is very scalable.
2. Programming Language
Ethereum uses Solidity and Vyper as the core language. On the other hand, Solana uses C, C++, and Rust. They are better known. However, Solana’s architecture is more complex.
3. Decentralization
Ethereum was more decentralized when they used POW. Now there is a chance of less decentralization after The Merge. Fewer parties control the majority of staked ETH.
On the other hand, Solana faces a similar issue. 35% of their staked SOL is in the hands of the top 30 validators.
4. Downtime
Since Ethereum started, they never experienced any downtime. Congestion, yes, plenty, downtime, no.
On the other hand, Solana has a history of quite a few downtimes. This is an area they need to work on.
5. Network size
Ethereum wins this hands down. They have been around a few years longer and lead in the NFT and DeFi spaces. DeFiLLama tells us that Ethereum has a TVL of $31.35 billion with 536 protocols. Solana has a TVL of $1.3 billion with 81 protocols. See the picture below.
6. Market cap
Both chains have their native coins. The current market cap for ETH is $154.7 billion. The second-biggest market cap after Bitcoin. ETH also became deflationary after The Merge.
The market cap for SOL is $11.3 billion. SOL is inflationary.
Source: DeFiLlama
Solana vs Ethereum for Developers
Developers look at the underlying technology. Solana is fast and can scale. On the other hand, Ethereum has higher trading volumes and more TVL.
Solana can grow bigger, but they need to attract more developers. But they use a better-known coding language. On the downside, their architecture is more complex.
Once sharding is in place, Ethereum expects 100,000TPS. So, if you want to launch NFTs, Solana offers better deals for us, the users. It’s a choice that developers must make, with an eye on the future. Who do they think will have the better cards in 5 or 10 years?
Both chains have advantages and disadvantages. Ethereum is an established chain that has proven itself. Although, with the change to PoS, new challenges may arise. Their devs community is enormous. Solana is fast and offers scalability. Both are eco-friendly now, due to PoS.
Ethereum is slow and expensive. Solana has a much smaller ecosystem and lacks transparency. Open the Tweet below and watch the video!
Solana Vs Ethereumđź‘€ pic.twitter.com/PjJy5qH0TI
— nftbadger (@nftbadger) September 22, 2022
Conclusion
It’s an interesting discussion about which one is better, Solana vs Ethereum. Both have their strong and weak points. A more interesting question is where you see both chains in 5 to 10 years. Whoever is ahead in your opinion, that’s where you should put your money. And the devs should put their dApps there.
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