Ethereum vs. Solana. Two of the most recognized blockchains in the crypto-economy.
When it launched in 2020, the big question was if Solana was the “Ethereum Killer”. Well a few years have passed, so let’s set these protocols side-by-side and draw some fresh conclusions with regards to this competition.
This article explores the following:
- What exactly are Ethereum and Solana;
- What are their technical specifications;
- How do they compare in terms of performance and economic activity; and,
- How do they compare with regards to tokenomics and staking.
Let’s roll.
What are Ethereum & Solana
Ethereum and Solana are decentralized, proof of stake (POS), layer one (L1), blockchain protocols. Both are open-source and have smart contract functionalities.
In simple terms, both are global computer networks that anyone can access, use, or build applications (dApps) within. These protocols are open, ever-evolving, digital marketplaces that allow people to connect for commerce, entertainment, and self-expression.
Ethereum has the largest, most diverse economy out of any POS L1. The protocol commands a 20% market dominance (with a $200 billion market cap) and is the DeFi and NFT leader. The network did suffer congestion and exorbitant transaction fees throughout 2020 and 2021, but those issues appear to largely be resolved due to a successful POS transition and newly developed layer two (L2) infrastructure.
Solana is the fourth-largest POS L1 blockchain with a market-cap of $8 billion. Known for its super cheap transaction fees and extremely high transactions per second (TPS), Solana has previously been called an “Ethereum killer.” However, this narrative appears to no longer be in play in part due to chronic outages that plague the network.
Ethereum and Solana’s native currencies are ETH and SOL, respectively.
Ethereum vs Solana: Technical Specifications
Tech is the foundation from which everything else follows (utility, adoption, price).
So let’s explore Ethereum and Solana’s decentralization characteristics, consensus mechanisms, other specifications, and developments in progress.
Decentralization
POS decentralization can be measured from the following three metrics:
- The number of active validators in the network;
- The percentage of staked tokens compared to total supply; and
- The staked token supply distribution across the validators.
Here’s the Ethereum vs Solana decentralization breakdown:
Ethereum’s large (and growing) number of active validators is fantastic! It shows the network is healthy. However, the percentage of staked tokens to overall supply is low (and might drop further due to the Shanghai / Shapella upgrade). Moreover, a lot of staked ETH is in the hands of just a few custodians.
Solana’s active validator count has also been steadily increasing over time, although the total number is much lower than Ethereum’s. The percentage of staked tokens to overall supply is high, which is a positive. However, just the top 32 SOL validators collectively control 33% of all staked SOL. This means that these 32 could halt the network if they colluded together.
But Solana’s glaring decentralization issue is that the network uses only one validator “client.” Thus, the entire network is exposed to one single…
David learned about bitcoin in 2015 and has closely followed the crypto industry since then.
His professional interests center around bitcoin, layer-one blockchain protocols, decentralized finance, and clean energy.
An attorney by trade, David has held licenses to practice law in the State of Hawaii and in US federal courts.
