Two of the largest blockchains for DeFi and NFTs are Ethereum and Solana. Both networks have wide ecosystems and individual traits that make them appealing. But how exactly do you compare Solana with Ethereum? Solana has been deemed the “Ethereum killer” within crypto communities. But is that really true? Is Solana better than Ethereum?
This article will discuss the main differences between the two blockchains. We’ll be looking at the underlying technology and the core features of each blockchain, as well as the expanding DApp ecosystem.
In this guide:
- What is Ethereum?
- What is Solana?
- Solana vs. Ethereum: What are the differences?
- Solana vs. Ethereum: Which one is better?
- Frequently asked questions:
What is Ethereum?
Ethereum is the first programmable blockchain, which enables developers to build decentralized applications using its general-purpose smart contracts feature.
The Ethereum blockchain can also be used for non-fungible tokens (NFTs) and decentralized finance (DeFi) apps. Ethereum was built with the intention of being everything to everyone and serving a broad range of specialized applications. And that is precisely what it does. It offers security and a complete set of tools to build any decentralized application.
The blockchain’s native asset is ether (ETH), and it is also used for paying the gas fees for transactions. However, Ethereum is currently undergoing a proof-of-stake (PoS) transition, which will bring several benefits to the network, including lower costs.
What is Solana?
Solana was created to solve the scaling challenges faced by the Ethereum blockchain. This is due to the increasing interest in crypto and the bandwidth limitations that limit transaction throughput for anyone who wants to use a particular blockchain. Solana uses clever technical tricks to find convincing solutions to problems that are not being solved by other blockchain platforms.
Like Ethereum, Solana provides a platform for non-fungible tokens and decentralized applications (DApps). These digital versions of collectors’ items like artworks have created a lot of excitement among digital artists like 3D modelers and visual effects artists. One of Solana’s first ventures in this direction was Degenerate Apes. This collection contains more than 10,000 portraits that can only be bought in SOL. This can have a significant impact on the currency’s value — the trading volume for Degenerate Apes amounts to tens of millions.
Solana vs. Ethereum: What are the differences?
Both blockchains have their fans and tons of apps already running on them. However, Ethereum is the most popular because it offers a more transparent and sophisticated ecosystem of DApps. There are certain differences that can’t be overlooked between the two. We will examine the differences between these blockchains from ten different perspectives.
Ethereum 1.0 relies on a PoW consensus mechanism, which is the same mechanism used by Bitcoin’s blockchain. This means that the network is protected by miners, who use their computational power to validate blockchain transactions and generate new blocks. This is the essence of the decentralized network, and it serves to increase the security of the network. However, the PoW mechanism can only process a few transactions per second, which is a huge impediment to a growing decentralized network.
Solana is different from Ethereum in that it uses proof-of-history (POH). In essence, it requires a series of computational steps to determine the cryptographical time between two events. You can track each transaction’s order by adding timestamps and adding them to transactions. This order sequencing is fundamentally different from the one in Bitcoin or Ethereum, where transactions are not placed in a timely manner.
Another essential difference between Ethereum and Solana is its “stateless” architecture. This helps to reduce memory consumption. Because the entire network’s state does not need to be updated for every transaction, transactions can be performed sequentially. This makes Solana extremely scalable.
2. Programming language
Developers can create programs using smart contracts that run on decentralized blockchain networks. Each node on the network hosts its own virtual machine that executes instructions as they are added to the digital ledger.
The security of smart contracts is affected by the programming languages that a smart-contract platform supports and the virtual machines it uses.
Of course, the programming language used is important as developers who are more familiar with it, will be less likely to make mistakes. This means that an older virtual machine might be more stable and have fewer errors than one that is newer.
Ethereum uses the custom-built Ethereum Virtual Machine (EVM). Its smart contracts are written primarily in custom languages such as:
- Solidity (inspired by C++)
- Viper (Pythonic Language)
- Yul/Yul+ (intermediate language to EVM)
- Fe (based on Rust and Python)
Solana, on the other hand, prefers to use more well-known languages like C, C++, and Rust.
Solana’s architecture is more complicated and supports multithreading. It also uses the Gulf Stream transaction forwarding mechanism to run its programs instead of mempools.
The details of Solidity, the programming language used by Ethereum, can create many vulnerabilities in Ethereum smart contracts when used by inexperienced developers. Although Solana uses more familiar programming languages, the complex architecture can pose security risks when code isn’t thoroughly audited by experienced programmers.
Decentralization stands at the core of blockchain technology. And it is one of the main differentiators when comparing Solana with Ethereum. The ultimate goal is to eliminate systems in which an individual or group has significant control over them. This helps to prevent abuse of power and improves resilience.
However, decentralization can also pose a challenge in blockchain systems. PoW networks led the way to mining pools, which created an environment where several groups could have centralized control over the blockchain.
PoS, on the other hand, is a system where the highest stakeholders also receive the greatest rewards. This “rich get richer” design can allow for the centralization of power.
Solana is more centralized than Ethereum. Solana’s top 30 validators hold over 35% of the total stake. The top validators have thousands of SOL staked and control a significant percentage of the network.
Ethereum is the first programmable blockchain network and most of its flaws have been sorted out since its inception. Although it can sometimes get congested, it is never down because it is significantly more decentralized than other chains. It’s actually part of the reason Ethereum has struggled to scale. The project wants every crypto user to be capable of running an Ethereum node on any hardware. Since its inception, Ethereum has never been down.
Solana is, however, still struggling with some of the challenges of creating a truly decentralized network. The chain has experienced several downtimes since its inception.
The first Solana outage took place in Dec. 2020. It lasted for five hours and no funds were lost. The second Solana outage took place in Sep. 2021. It lasted for 17 hours. This downtime was caused by a DDoS (Distributed Denial of Service) attack.
A DDoS attack is when a malicious actor attempts to overwhelm a network. What was the result? Solana was halted for several hours and lost some of its investors, but no funds were lost.
However, the network experienced a third shutdown which was not the result of an attack. In Jan. 2022, bot swarms overloaded the network during an Initial DEX Offering. According to reports, the network reached a peak of 400,000 TPS (transactions per second). While this downtime is alarming, the fact that Solana could handle up to 400,000 TPS is impressive.
5. Transaction cost
This is crucial as many people hate to pay transaction fees. Solana is well-known for its low transaction fees. Ethereum has a higher transaction cost than Solana.
The Solana blockchain has a block time of 0.4 seconds and a block size of 20,000 transactions, compared to Ethereum’s block time of 13 seconds and block size of only 70 transactions.
6. Transaction speed
Solana is actually one of the fastest blockchains when it comes to processing transactions. This is due to the network architecture. Ethereum prioritized decentralization, while Solana was more focused on throughput.
Bear in mind that after some upgrades, the Ethereum network should be able to process 100,000 TPS.
7. Network size
Ethereum is the largest network that supports smart contracts. According to DeFi Llama, Ethereum’s TVL (Total Value Locked) is up to $53.21 billion, while Solana’s TVL is only at $2.54 billion. The difference between the two networks is more than 95% when it comes to TVL. This means that most financial apps prefer Ethereum. Solana is barely starting to receive support from financial institutions, and it might take a while to catch up to Ethereum’s colossal network size.
8. Market cap
Both Ethereum and Solana have their own native coins that are used for paying the transaction fees. These are some of the two most important coins in the entire crypto market.
As of July 2022, 1 ETH is $1,465 and the market cap of Ethereum stands at $178.4 billion, with over 121.7 million ETH coins in circulation. Ether ranks as the second cryptocurrency, just under Bitcoin.
The Solana network also doesn’t have a fixed maximum supply of SOL. However, it does have a fixed inflation rate, which is diminishing over time, as it tends to reach 1.5% in the long run. As of July 2022, 1 SOL equals $36.33, 345.89 million SOL in circulation. This makes the market cap of Solana $12.57 billion.
9. DeFi ecosystem
Given the age of Ethereum, it has a much larger and more diverse DeFi ecosystem than Solana. However, Solana is trying hard to attract more developers to the network by launching a variety of marketing strategies such as hackathons and bug-bounty programs. Since its inception, these tactics have helped to increase the number of users and developers.
Ethereum is the main network for some of the most used DeFi apps, such as MakerDAO, Lido, Uniswap, and Aave. Moreover, 2021 brought a new trend to the blockchain world, which is the NFT craze. The most popular NFT marketplaces are built on Ethereum.
It’s important to point out that the DeFi ecosystem on Solana remains in its infancy. However, there are several Solana DApps that are starting to attract new users. This is due to extensive hackathons. Some of the most DeFi apps on Solana are Solend and Raydium.
Given that blockchain is still a new technology, the ecosystem is still developing. There is a strange correlation between Solana and Ethereum – whenever Ethereum’s gas fees rise, Solana users seem to increase.
While nobody can predict the future, we can say that the current DeFi ecosystem of Ethereum is more extensive and offers a broader range of applications.
Although Ethereum wasn’t the first to use non-fungible tokens to create NFTs (Non-Fungible Tokens), it was one of the most important protocols to promote them. Although the trading of NFTs exploded in 2021, NFTs have been used far long before that.
CryptoKitties was one of the first blockchain apps to have NFTs. It became media-worthy when the app caused a huge congestion on Ethereum in 2017.
While Solana is new to the NFT table, it is catching up quickly. Solana allows buyers to buy NFTs with no transaction fees and few congestion issues. It means that Solana and SOL NFTs can be more easily accessed than those on Ethereum.
The price of Solana’s NFTs started picking up in the second half of 2021. In Sep. 2021, a Degenerate Ape NFT was sold for $1.1 million. This sale marked the first million-dollar NFT transaction on the Solana network. A Solana Monkey sold for $2 million in Oct. 2021.
|Year of Foundation||2013||2017|
|TPS (Transactions per second)||13–15||50,000–65,000|
|Transaction cost||3 Gwei ($0.09)||0.0000053 SOL ($0,0000014)|
|Block Times||15 seconds||1 second|
|Consensus Mechanism||Proof-of-Work||Proof-of-History / Delegated Proof-of-Stake|
|Programming Language||Solidity||Rust, C, C++|
|Architecture||Stateful architecture||Stateless architecture|
|Scalability||Limited Scalability||High-Performance protocol for scalability|
|Advantages||• Established and proven|
• Large developer community
• Huge DeFi and NFT ecosystem
|• Fast transactions and low fees|
• High scalability
• Has a low environmental impact
|Disadvantages||• High transaction costs|
• Slow transactions
• New programming language
|• Fewer projects|
• More centralized
• Lack of transparency
Solana vs. Ethereum: Which one is better?
When comparing Solana with Ethereum, it’s important to pinpoint the exact features or needs for your actions on the blockchain.
If you’re a developer, you will be very interested in the underlying technology, which is the main topic when comparing Ethereum with Solana. Furthermore, each blockchain has its own consensus mechanism and has different ways of scaling. Solana is the fastest blockchain, but Ethereum has a much higher trading volume and is more used in the crypto market.
Investors may be more interested in the growth prospects of the two networks. As the decentralized world expands, one may assume that both of these networks will grow in the future. But how much will the growth be, and what will be the fate of their coins? This is something that is worth looking into.
Ethereum and Solana continue to develop and bring groundbreaking changes. To learn more Ethereum and Solana from those more experienced, consider joining the BeInCrypto Telegram Group. The members will be glad to answer all of your questions.
Frequently asked questions:
Is Solana more secure than Ethereum?
No. Ethereum is more secure than Solana. It has more active members in the community and developers. Solana lacks the security insights that Ethereum has achieved after over seven years (2015) since its launch.
Is Solana an Ethereum killer?
The crypto spaces have often referred to Solana as the “Ethereum killer” due to its similar role in the crypto world. They both enable developers to build decentralized apps.
Will Solana be as big as Ethereum?
Solana could be just as large as Ethereum, if it manages to attract more developers to launch their apps on the Solana network. As of 2022, there is a huge gap between the two networks, and Ethereum has a TVL (Total Value Locked) that is 95% higher than Solana’s TVL.