There was a lot of excitement and admiration when Ethereum popularized smart contract technologies in the blockchain world. However, Eth’s slow transaction processing rate and high transaction fees continue to be a problem for the system.
Many blockchain initiatives at the time began working toward the objective of enhancing smart contracts on a far more effective system. Solana (SOL) and Cardano (ADA) are the 2 largest and most visible of these projects (ADA). In the field of smart contract-based decentralized application (DApp) development, both networks have become strong competitors to Ethereum.
Blockchain technology presents a possible solution to the world’s current financial and governance issues. The Solana blockchain technology is a layer-1 system for dApps and smart contracts creation. The Solana protocol is driven by a mixture of proof-of-stake and proof-of-history consensus processes. Solana produces historical records with connected proofs of time using the PoH consensus process. As a result, Solana improves its effectiveness and throughput rate.
The Cardano platform uses a decentralized Proof of Stake (PoS) consensus process. The proof-of-stake (PoS) consensus method uses less energy than the proof-of-work consensus mechanism employed by classic blockchains such as BTC and ETH. Payments, voting, and the country’s currency control are among the projects that use Cardano’s technology.
Smart contracts are software that is kept on a blockchain and run when certain criteria are met. The conditions between sellers and buyers are defined in code in smart contracts to ensure that the outcome is certain without the need for an intermediary. Trades are tracked and irreversible, and the code regulates their execution. Smart contracts can also automate a workflow by triggering actions when certain circumstances are met.
The Proof of Stake vs. the Proof of History
The principles of blockchain were pioneered by Btc and Eth. Both, however, have been panned due to lack of application performance and high power consumption. The use of the PoW consensus technique contributes to the scalability issue. Proof of Stake eliminates the slowdowns caused by Proof of Work while also ensuring security.
Solana, on the other hand, can process up to 50,000 TPS by using the PoH consensus mechanism to evaluate the passage of time, significantly reducing the amount of data required for consensus. PoH aims to reduce the strain of validators that validate blocks by making the coding of time into the blockchain easier. The importance of time stamping is that it informs the system that activities have happened in a specific order.
The Ouroboros system, which Cardano uses to validate transactions, is a one-of-a-kind PoS system. Through its staking system, it prizes validators with a series of random and chosen rewards. Ouroboros, the 1st provably secure PoS protocol, was developed using peer-reviewed research. Ouroboros combines cutting-edge technology with mathematically validated methods to ensure the safety and long-term viability of the blockchains it supports.
Ethereum, the most popular protocol for DeFi, has ushered in a new era of financial solutions. DeFi is expected to grow at a breakneck pace by 2021. However, Ethereum’s incapability to scale and high service fees limit the DeFi space’s future growth. In this region, blockchains such as Cardano and Solana can benefit and continue to accelerate DeFi adoption by providing higher throughput and lower transaction costs.
Cardano’s latest deployment of smart contracts is critical for the venture to play a major role in DeFi’s growth. The program is now on a quest to grow its portion of the DeFi market. To help achieve this goal, Cardano’s venture capital unit, EMURGO, is spending $100 million to help the Cardano Decentralized finance ecosystem grow. SundaeSwap is a DEX that aims to be the main DEX on Cardano, akin to Uniswap.
Solana is gradually establishing itself as a center for DeFi dApp’s usefulness. This year, Solana’s total value-locked increased from $900 million to almost $10 billion. Two Solana-based companies, Port Finance and Solend, are trying to act as decentralized banks.
With a TVL of roughly $200 million, Port Finance is among the biggest DeFi dApps on Solana, and it works similarly to the Compounds and Aave protocols. Solend is another one of Solana’s DeFi banks, but it has a lesser TVL of $90 million. Most of the assets are available on Solend as they are on Port, with the inclusion of Raydium and Eth, allowing traders to lend against a wider choice of assets.
What Is Solana (SOL)?
Solana is a blockchain that focuses on smart contracts and has some of the cheapest costs and fastest speeds in the market. Solana’s technical structure allows for the simultaneous execution of several smart contracts. This aids the platform in achieving its technical superiority.
Solana’s technological prowess is bolstered by its Proof of History block validation approach. PoH is unique from the 2 most frequent methods of validation, Proof of Work and Proof of Stake. Validator networks in PoH use unique timestamps to process and validate transaction blocks.
Solana was created with the primary purpose of providing a smart contract platform that is both faster and less expensive than Ethereum. There are now over 350 DApps available on it. The DeFi platforms Orca, Raydium, and Saber, as well as markets Magic Eden and Solanart, are among Solana’s most popular applications.
With a market valuation of approximately $59 billion, Solana is the fifth-largest cryptocurrency platform.
What Is Cardano (ADA)?
Cardano is a Proof-of-stake based blockchain that, like Solana, aims on offering a low-fee, fast, and extensible smart contract platform. Cardano was one of the first platforms to attempt to provide an effective way to Eth’s slow and expensive network, and it was introduced in 2017.
Cardano’s 2-layer model is a unique characteristic. Cardano, unlike other blockchains, divides its operation into 2 layers. The 1st layer is the fundamental smart contract layer, which does all of the calculations required to execute smart contracts. It’s referred to as the computing layer by Cardano. The settlement layer is the 2nd layer, which is where all cryptocurrency asset transfers take place.
Cardano has been slower in implementing its smart contract features than Solana, despite being released three years earlier. The platform only confirmed complete backing for smart contracts in September last year. As a result, its decentralized application and decentralized finance projects are just getting started in the blockchain world. The DeFi networks Ergo and Meld are two of the more well-known early Cardano initiatives.
ADA has been one of the most famous cryptos among traders since early 2021, despite the fact that Cardano only launched its smart contract capabilities in September. With a market valuation of $52 billion, Cardano is now the sixth biggest cryptocurrency platform, directly after Solana.
What Similarities Do Solana And Cardano Share?
- Smart Contract And Decentralized Applications Support
These 2 blockchains have a lot in common when it comes to smart contracts and Decentralized applications. Both systems were built with smart contract technology in mind, however, it required Cardano many years of research to make it possible.
- Cheap Gas Fees
Another feature that Solana and Cardano have in common is their extremely low gas fees when opposed to the Ether platform. However, the 2 networks are not identical when it comes to average gas fees.
Furthermore, they both outperform Ether in terms of transaction processing speed. While their actual speeds vary, they all have one thing in common: they are far quicker than the world’s biggest smart contract platform.
Additionally, both platforms have excellent scalability, which is aided by their better technical qualities.
What Is the Difference Between Solana & Cardano?
Although both Solana and Cardano aim to enable smart contracts on a scalable platform, they have much more contrasts than similarities.
- Method of Block Validation
One of the most basic technical aspects of every blockchain is the block validation process. Solana and Cardano approach this validation is slightly dissimilar ways.
While Solana employs the PoH consensus technique, which is based on the distinctive validation of blocks, Cardano employs the PoS consensus technique. The primary principle behind PoS is to give validator nodes block confirmation rights based on the number of cryptos they have on the platform. The more cryptocurrency assets you own, the more likely you are to be granted the authority to validate the following block.
- Different Levels Of Decentralization
For many blockchain advocates, the idea of decentralization is almost sacred. Many of these consumers would be hesitant to use systems that are viewed as concentrated, especially ones with low levels of decentralization.
The overall number of validators nodes charged with validating transaction blocks – one of the most generally used indicators of decentralization – is used to determine the amount of decentralization here. The greater the decentralization degree of a network, the more validation nodes there are.
On Cardano and Solana, the number of validators is roughly 3,000 and 1,000, correspondingly. By this standard, Cardano is a little more decentralized system than Solana.
- Fees For Transactions And Gas
Despite the fact that both blockchains have substantially lesser fees than Eth, there are still major disparities in this statistic. Among the large-cap platforms, Solana has some of the cheapest fees. The average blockchain transaction costs roughly $0.00025.
Cardano’s fees have risen dramatically in the past months as the platform’s smart contract functionality has been enabled. The average total fee on Cardano is currently $0.35, though this value may alter in the future as more DApp applications are launched. Solana is 1.400 x cheaper to trade on than Cardano, based on present average costs.
- Transaction Speed
The current technological capacity of Solana is 65,000 operations per second. Because blockchain technology is far behind Eth in terms of network traffic, it only processes 1,000 – 2,000 TPS on average, significantly less than its maximum capacity.
Cardano’s performance, on the other hand, is substantially slower, at roughly 250 TPS, which is much quicker than Eth’s sluggish 15 TPS. Cardano presently processes over 3 transactions per second on average, which is almost 80 x its maximum capacity.
As a result, Solana is approximately 260 x quicker than Cardano in terms of maximum TPS capacity. Solana handles over 500 x more transactions per second than Cardano on a daily basis.
Price Performance and Roi for Solana and Cardano in 2021
Both Solana and Cardano have done well in the crypto market last year, but Solana has outperformed Cardano in terms of performance and ROI. Solana’s SOL token began the year at 1.6 dollars and is now worth approximately $195, a stunning rise of 12,088 percent.
Cardano’s ADA, which was $0.18 at the start of the year 2021, is currently worth $1.56. While a 767 percent growth is impressive, it is approximately 16 times less than SOL’s 12,088 percent increase. ADA has still outperformed the total crypto market this year, which is up roughly 220 percent since the start of 2021.
What Does Solana and Cardano’s Future Hold?
Both blockchains are in the top ten cryptocurrency exchanges. In the cryptocurrency world this year, Solana has outpaced Cardano greatly, but Cardano’s rollout of smart contract features in September may shift the development between them.
Cardano may catch up to Solana and be the platform’s top performer this year as an early DApp surge develops. But, both these networks and traders should keep in mind one major market development coming up next year: Eth’s upgrading to Ethereum 2.0, a lot more effective and speedier PoS network.
According to the Ethereum Foundation, the new Proof of stake platform will be able to process up to 100,000 TPS once completed in Q2 2022. This is over 400 x quicker than Solana’s maximum speed of 65,000 TPS and Cardano’s maximum speed of 250 TPS. The improvement is also expected to result in a considerable reduction in transaction fees
Most blockchain platforms whose main value proposition is “being quicker and cheaper than Ethereum” may struggle if Eth’s technological projections come true. Even if Eth 2.0 becomes a tremendous success, Cardano and Solana are unlikely to collapse. Their current spectacular expansion, though, maybe limited.
Which Has More Room For Expansion: The ADA Or The SOL?
Even though Cardano’s potential is limited due to its big market value ($70 billion), it has a lot of room to expand in contrast to Ether. Solana has a far smaller market valuation ($45 billion) than Cardano, but it has more than 400 projects using its system. This feature provides Solana with tremendous development potential in the future. SolAPE, a DEX designed to attract people through ease of access and a profitable and exciting ecology, is one of the more noteworthy Solana projects.
These two platforms are well-positioned to develop as two of the leading smart contract blockchain protocols if the crypto markets remain positive and Ethereum continues to suffer scalability and high fee difficulties.
Where Can I Get Solana And Cardano?
You don’t have to hop through so many hoops to receive Solana because it’s a well-known cryptocurrency. The ADA and SOL currencies are available for purchase on cryptocurrency exchanges such as Coinbase Global Inc, Crypto.com, and SoFi Technologies Inc. Coinbase is a centralized exchange that is simple to use and ideal for newbies to the cryptocurrency market. It’s a good idea to look into a few different exchanges because each one has its own set of advantages.
ADA vs. SOL Use Cases
Within the Cardano ecosystem, ADA has a wide range of applications, including rewarding nodes, staking, and peer-to-peer transactions. The ADA coin’s goal is to be a worldwide token that can be utilized as a valued asset like currency, perform any function, and access Cardano’s services. This functionality enables ADA to conduct value transfer and have utility comparable to BTC and ETH.
The token holder can delegate his tokens to receive rewards by adding to the network’s security in Cardano’s stake delegator pool. The Cardano ecosystem’s governance relies heavily on the ADA coin. The ADA coin allows members to select on the team’s or the Cardano industry’s proposed upgrades or funding ideas. On the Cardano blockchain, ADA tokens are necessary to develop smart contracts and applications. To execute smart contracts on the blockchain, programmers must have ADA.
SOL is used as a digital currency in Solana. In accordance with its PoS consensus method, the SOL token has two significant use cases: paying for operations and staking tokens. New
Solana and Cardano are two of the world’s top ten blockchain systems. Both of these networks have one thing in common: they are both centered on smart contracts and decentralized application technology, and their platforms are significantly faster and less expensive than Ethereum’s. Despite certain similarities, there are substantial variations between Solana and Cardano. They are decentralized to varying degrees and are based on distinct block validity models.
Furthermore, as compared to Cardano, Solana is a significantly quicker and less expensive network. It has also outperformed the latter in terms of market performance. Both cryptographic protocols are projected to continue to increase in popularity. However, both platforms may face increased growth hurdles if Eth is upgraded to a more advanced form this year. A lot will hinge on how they both react to this expected tectonic market shift.