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For a while, Solana was known as Ethereum and especially Cardano’s competitor but that soon changed after its rapid growth. Why is there debate around Cardano vs. Solana in the first place? If one has come out on top, is the other necessarily worse? Let’s unpack in this comparison guide.
Key Takeaways
- Both Solana and Cardano belong to the class of blockchain projects called Layer-1, also known as platforms for smart contracts.
- Both blockchains operate on specifications of proof-of-stake, which makes them energy-efficient. However, they have vastly different approaches to processing transactions, resulting in differences in performance.
- Cardano entered the crypto market earlier, but Solana managed to reach quicker ecosystem growth and amass more value.
Overview of Cardano and Solana
What is Cardano (ADA)?
Cardano is an open-source decentralized public blockchain and cryptocurrency project. It is known for its unique proof-of-stake consensus algorithm called Ouroboros and its proprietary programming language Plutus. Cardano focuses on providing a more secure and sustainable blockchain ecosystem through its research-driven approach.
Cardano’s ADA token secures the network through staking and governance. In comparison to legacy networks such as Bitcoin (BTC) and Ethereum (ETH), the Cardano network has low transaction fees. Cardano’s higher throughput, however, is supposed to keep validation feasible, as higher transaction volumes make up for low fees.
The core team strongly focuses on community engagement and development. Major contributors are Cardano Foundation and Input Output Global, responsible for outreach and protocol development respectively.
What is Solana (SOL)?
Solana is a blockchain network that blends Proof-of-History (PoH) and Proof-of-Stake (PoS) consensus mechanisms. The unique design boosts scalability and functionality, enabling fast transaction speeds and high transaction throughput.
To use Solana, you pay transaction fees (gas) in SOL tokens which reward validators in turn. It also powers a growing ecosystem of decentralized applications (dApps) as its native cryptocurrency.
Blockchain Technology Comparison
Consensus and Validation Model
Cardano uses an energy-efficient and secure proof-of-stake (PoS) consensus algorithm called Ouroboros. Its unique perk is unbiased randomness in leader selections, which prevents validators from gaming the algorithm and makes the network more secure.
Solana uses a unique consensus mechanism that combines Proof-of-History (PoH) and PoS, which enables fast transaction speeds and high scalability. Proof-of-history works as a timestamping system for new blocks that doubles as proofs for transactions, securing valid ones as more time passes.
Both Cardano and Solana have their own strengths and weaknesses in terms of consensus mechanisms. Cardano’s block size is limited to 88kb and the Solana blockchain at least used to be more unstable than other blockchain networks. Whether you are a user or a holder, being aware of key differences in the underlying structures, as well as their strengths and shortcomings, is a must.
Transaction Speed and Scalability
The Solana network has proven to be faster than Cardano, with a peak capacity of 65,000 transactions per second. Cardano’s scalability is limited to 250-1,000 transactions per second, but it has a more secure and sustainable approach to blockchain development.
In practice, the real transaction throughput is lower due to both Solana and Cardano operating under maximum capacity. According to Cexplorer.io, ADA’s real TPS is closer to 2–3 transactions per second but at the peaks of activity, maximum TPS managed to outperform Bitcoin’s 7 tps. Solana blows this out of the water with a consistent 3,800 tps during the past seven days, albeit at a 90% success rate.
Similarities and Differences
Sustainability and Energy Efficiency
Both Solana and Cardano are committed to minimizing environmental effects and using sustainable systems thanks to proof-of-stake (PoS) consensus algorithms. By eliminating energy-intensive computing, PoS consumes less energy than proof-of-work (PoW) algorithms.
Cardano’s focus on sustainability and energy efficiency is a key aspect of its research-driven approach. Nevertheless, Solana was also promoted as a greener alternative to Bitcoin and pre-Merge Ethereum (ETH).
Market Performance and Growth Potential
Neither Solana nor Cardano eschewed market volatility and value fluctuations along with the rest of the cryptocurrency market. Let’s compare which side of the Solana vs. Cardano debate performs better in terms of price and value.
Solana has experienced rapid but consistent growth, especially in the past crypto market cycle. As far as altcoins in 2021 go, getting into SOL early was akin to winning a lottery. A growing ecosystem of decentralized applications (dApps) and a strong focus on scalability and functionality have certainly helped it cement itself in the top five in the blockchain space.
Despite Solana being exemplary of striking gold in the past cycle, Cardano has had fewer green months than Solana since August 2021 but experienced stronger growth. The biggest monthly change ADA recorded was +280% in February 2021. Over the years, a strong focus on community engagement and development propelled its performance.
Another point to consider is the tokenomics of Solana and Cardano. SOL tokens do not have a limit on the total supply, unlike ADA. While it could mean that the supply of SOL can increase slowly but indefinitely, it is also more sustainable in the long term to onboard a growing user base. In terms of value, however, the limited supply of ADA ensures that the supply dilution will have less effect. In the worst-case scenario, if all ADA enters circulation but the demand together with value keeps growing, it can hurt the actual usage of the token.
Cardano Blockchain Features
Pros of Cardano
- Open source ethos;
- Strong emphasis on security;
- Research-driven standardized approach;
- Energy-efficient Ouroboros PoS protocol;
- Competitive staking rewards for ADA validators.
Cons of Cardano
- Core functionality like smart contracts is still in development;
- Concerns around the ability to scale exponentially;
- Centralization criticisms of select stakeholders.
Solana Features and Benefits
Pros of Solana
- Extremely fast 65,000+ TPS transaction speeds;
- Low $0.00025 average transaction fees;
- Rapid growth in adoption and usage;
- Expanding ecosystem of builders.
Cons of Solana
- Centralization concerns for validators;
- Doubts in scaling following the network expansion;
- Regulatory uncertainty.
Developer Interest and Adoption
Solana has a rapidly growing community and developer ecosystem driven by its high performance and support for innovative crypto projects. These days, the latest trend that further accelerates the steady growth of the Solana network is meme coin trading.
On the other hand, Cardano boasts a strong and dedicated community deeply involved in the platform’s development. Aside from the aforementioned parties, the research and development for the Cardano ecosystem are done by Emurgo, Intersect, and Pragma, not to mention a dozen more independent GitHub contributors.
Cardano has collaborated with global AI leader SingularityNET, now part of the Artificial Superintelligence Alliance (ASI). Fetch.AI, another major player at the intersection of blockchain technology and AI chose the Cardano blockchain to support their native token FET. The smart contract development on Solana does not fall behind in the AI race with more builders creating AI agents on this blockchain.
How to Purchase ADA and SOL?
Both Cardano’s ADA and Solana’s SOL tokens can be purchased from all major cryptocurrency exchanges internationally, including Binance, Coinbase, Kraken, and KuCoin.
If you own some crypto, you can swap it for either SOL or ADA on ChangeHero in five simple steps by swapping. No account registration or obligatory KYC is needed:
- Choose the currencies on the home page, amounts, and the type of exchange. Provide your wallet address in the next step and check the amounts;
- Double-check the provided information, read and accept the Terms of Use and Privacy Policy;
- Send the sum of the cryptocurrency you will be exchanging in a single transaction. Fixed Rate transactions have a 15-minute limit;
- All done? Now we are doing all the work: checking the incoming transaction and doing the exchange as soon as it arrives;
- As soon as the exchange has been processed, your crypto will be on its way to your wallet.
Our support service is available anytime in the chat on our website or through the email: [email protected].
On our website, you can also buy ADA and SOL or sell them with a bank card and APMs for fiat currencies through our partner’s widget. Check out the full instructions to learn how!
Conclusion
Obviously, the Cardano vs Solana debate has no single definitive answer. Some crypto enthusiasts can choose the former for its formal approach, potential price performance, and tokenomics. Others may prefer the consistent delivery and actual usage of the latter. And nobody says you can’t make space for both in the portfolio!
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Frequently Asked Questions
Is Solana a better investment than Cardano?
Solana is designed for people looking for fast transaction speeds and scalability while Cardano attracts investors through its methodically and securely designed blockchain platform. It is important that investors understand their investment objectives to align them with their personal risk tolerance.
Which coin will beat Solana?
At the time of writing, Solana (SOL) ranks fourth by market capitalization, behind BTC, ETH, and USDT. Its closest competitors are BNB and XRP but the former is about $50 million in market capitalization behind and the market capitalization of the latter is only $5 million more than half of Solana’s.
Why is Solana beating Cardano?
Cardano practices formal verification and an academic approach to building. It also generally has a higher entry threshold due to using a proprietary programming language.
Solana, on the other hand, enables coding in Rust, a more widespread language. Without any doubt, this contributed to the explosive ecosystem growth.
Can Solana overtake Ethereum?
Can the Solana ecosystem ever surpass Ethereum? Solana’s performance surpassed that of Ethereum in the number of daily active users as well as in transaction volume in the year 2022. Ethereum is a competitive and highly-valued asset but is not easily surpassed due to its high-level ecosystem.
Is Solana a better buy than Ethereum?
When choosing between Solana or Ethereum, one should consider own goals and risk tolerance. Ideally, seeking investment advice from a professional is recommended on an individual basis.
Disclaimer
This article does not constitute financial or investing advice. When dealing with cryptocurrencies, remember that they are extremely volatile and thus, a high-risk investment. Always make sure to stay informed and be aware of those risks by conducting your own research. Consider investing in cryptocurrencies only after careful consideration and analysis and at your own risk.
