Nowadays, ‘just a meme’ is often synonymous to ‘imminent price explosion’. But this doesn’t mean Solana is simply another fad, to wash up on shore only to disappear again. The Solana blockchain is a high-quality chain and a serious contender in the crypto application space.
Just to remind ourselves, we can roughly distinguish between so-called crypto assets, such as Bitcoin which is first and foremost a store of value, and crypto applications, like Ethereum or Solana.
Trade off Between Efficiency and Extent of Decentralization
Over the past few months, as DeFi has gone into overdrive, scalability on the Ethereum network has become a serious issue. Gas fees are extremely high, sometimes leading to exchange fees on DEXs such as Uniswap rising as high as $80 USD worth of ETH, even just for a $100 trade. This situation became only more pressing with the explosive rise in NFT markets.
This is arguably one of the reasons why Binance Smart Chain, and BNB, have done so well over the past few months. DEXs built on BSC, such as PancakeSwap, are simply faster and cheaper, and therefore more attractive. It is significant, however, that in this case the trade-off has been between efficiency and the extent to which a platform can be considered decentralized.
Solana Compared to Binance Smart Chain and Ethereum
Solana has managed to avoid this trade off. Backed by some of the leading figures in the crypto space, Solana is carried by a broad body of independent developers. Take the below chart for example, where the the three blockchains are compared on the basis of some of the key metrics around security, decentralization and performance/scalability.
|Solana||Binance Smart Chain||Ethereum|
|Transactions Per Second||50,000||100||15|
|Avg. Fee Per Transaction||$0.00001||$0.15||$15|
|Transaction Latency||0.4 Sec||~75 Sec||~5 Min|
|Number of Validators||594||21||11,000+|
Solana clearly has the upper hand in this regard. Of course, the crypto space is not known for only prioritizing quality and technicals. Much of the growth in the crypto space can also be attributed to marketing, community dynamics, macro conditions and capital.
Looking ahead, we can see Ethereum flanked by Binance Smart Chain, Solana, and in the near future perhaps the Flare Network (partnered with Ripple) – each competing for market share in the smart contract and crypto utility space.
Promising projects on Solana include:
Focus on assisting yield farmers in tracking and optimizing their position.
Raydium provides on-chain liquidity to Serum’s central limit order book, meaning that Raydium’s users and liquidity pools have access to the order flow and liquidity of the entire Serum ecosystem, and vice versa.
Maps.me is an offline mapping service. In nine years, it has grown to 140 million users, with 60 million people using it to navigate 195 countries in 2020. Now, it is integrating with DeFi.
More Projects On the Horizon
There are a lot more projects in the crypto space that we will be looking at over the coming few weeks. While it’s been relatively quiet around Solana, compared to BSC, the amount of projects on the verge of being released or breaking through is something to take note of.