{"id":367949,"date":"2021-11-16T20:05:42","date_gmt":"2021-11-16T17:05:42","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum\/"},"modified":"2021-11-16T20:05:42","modified_gmt":"2021-11-16T17:05:42","slug":"the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum\/","title":{"rendered":"# The power of cheap transactions: Can Solana&#8217;s growth outpace Ethereum?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f3c80d370e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f3c80d370e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum\/#Is_Solana_a_threat_to_Ethereum\" >Is Solana a threat to Ethereum?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum\/#Solanas_17-hour_outage\" >Solana\u2019s 17-hour outage<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum\/#A_network_hiccup\" >A network hiccup?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/the-power-of-cheap-transactions-can-solanas-growth-outpace-ethereum\/#Interest_in_Solana_keeps_growing\" >Interest in Solana keeps growing<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># The power of cheap transactions: Can Solana&#8217;s growth outpace Ethereum? <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>The top cryptocurrencies by market capitalization keep changing over time as the industry matures. Solana (SOL) has seen its value skyrocket so far this year and has been consistently processing over 2,500 transactions per second.<\/p>\n<p>The cryptocurrency\u2019s price, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.tradingview.com\/symbols\/SOLUSDT\/?exchange=BINANCE\">according<\/a> to TradingView data, is up nearly 13,000% year-to-date as the year started with SOL trading slightly below $2. Solana is now changing hands-on exchanges for around $240.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-11\/2676b11c-afd1-4348-9e9b-be72c3ce7ba6.png\"><\/figure>\n<p>Solana is a blockchain platform that aims to achieve high transaction speeds at a low cost without sacrificing decentralization. To do so, it relies on a number of unique features, including a \u201cproof-of-history\u201d mechanism. This allows Solana to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/docs.solana.com\/cluster\/synchronization#:~:text=Solana%20takes%20a%20very%20different,before%20the%20proof%20was%20generated.\">process<\/a> an estimated 50,000 transactions per second, compared to Bitcoin\u2019s seven and Ethereum\u2019s 15.<\/p>\n<p>As the Solana network supports smart contracts, decentralized finance (DeFi) <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lications have found a home on it. Its ecosystem now has nearly $15 billion worth of crypto assets locked on it, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/defillama.com\/chain\/Solana\">according<\/a> to DeFiLlama data.<\/p>\n<p>Speaking to Cointelegraph, Kraken Intelligence manager Pete Humiston noted that almost all crypto assets have benefitted from a year-long bull run, although Solana has seen \u201cparticularly strong price appreciation due to its Web 3.0 experience.\u201d\u00a0<\/p>\n<p>Humiston added that transactions on Solana are \u201cinstant, cost a fraction of a penny and the ecosystem is easy to navigate thanks to user-friendly wallets and applications\u201d contributing to its adoption.<\/p>\n<p>Solana\u2019s adoption may be the result of retail investor demand that was priced out of Ethereum, according to Mindaugas Butkus, chief <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> officer of Solana-based decentralized exchange Solanax. He told Cointelegraph:<\/p>\n<blockquote><p>\u201cGrowing demand for DeFi applications and NFTs on Ethereum led to exploding gas fees, which made it expensive to use ETH. Transacting on Solana is inexpensive and transactions are processed in no time, making it an attractive alternative for retail investors.\u201d<\/p><\/blockquote>\n<p>Butkus added that Solana\u2019s base-level protocols attracted users for the same reason Ethereum\u2019s DeFi space initially did: flourishing innovation leading to a booming ecosystem with a good user experience.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_Solana_a_threat_to_Ethereum\"><\/span>Is Solana a threat to Ethereum?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As the price of Solana surged, many speculators suggested that SOL will one day overtake Ether (ETH) to become the second-largest cryptocurrency by market capitalization. Solana\u2019s focus on maintaining its decentralization while offering near-instant transactions at a low cost has been a way to attract users, but there\u2019s more to Ethereum than gas fees.<\/p>\n<p>Speaking to Cointelegraph, Adrian Kolody, founder of Domination Finance \u2014 a non-custodial exchange focusing on dominance pairs \u2014 said he believes there are \u201ctoo many users vested in Ethereum\u201d for it to be surpassed by Solana.<\/p>\n<p>To Kolody, Ethereum is \u201ca truly decentralized network whereas Solana falls more into the SpeedFi category.\u201d To him, there are idealists that refuse to interact with any ecosystem that isn\u2019t that of Ethereum:\u00a0<\/p>\n<blockquote><p>\u201cEthereum would have to totally bottle their promises for Ethereum 2.0 over the coming years for Solana to overtake it, and even if that happens, it is still very unlikely.&#8221;<\/p><\/blockquote>\n<p>To Kraken Intelligence\u2019s Humiston, it\u2019s in the \u201crealms of possibility that Solana could trade inline with Ethereum this cycle if it maintains momentum and grows its developer and user community.\u201d<\/p>\n<p>Humiston added that Ethereum has a \u201cnumber of tailwinds of its own\u201d that could justify its price moving up further this cycle. To the analyst, this potential price appreciation is \u201cwhy diversification among the largest smart contract platforms\u201d is worth considering at this point.<\/p>\n<p>Markus Bopp, chief technology officer of no-code nonfungible token (NFT) platform Unifty, told Cointelegraph that he believes Solana has \u201cgreat potential technically,\u201d and as it matures and developers organically jump onto its network it \u201ccould be a good #3.\u201d<\/p>\n<p>Bopp added that \u201cthis will take years moving forward,\u201d and right now it\u2019s \u201ca lot easier as a developer to jump on EVMs due to much lower barriers to entry,\u201d concluding:<\/p>\n<blockquote><p>\u201cHaving said that, Ethereum just can&#8217;t compete with the speed of transactions on Solana which developers may increasingly look at.\u201d<\/p><\/blockquote>\n<p>Jack McDonald, CEO of digital asset custodian Standard Custody &amp; Trust Company, told Cointelegraph that Ethereum will \u201calways have a prominent place in terms of market cap\u201d thanks to its first-mover advantage and \u201csignificant network effects.\u201d<\/p>\n<p>McDonald, whose company brought Solana staking to institutions earlier this month, added that Ethereum needs to get its transition to a proof-of-stake consensus mechanism right and \u201cdo it smoothly and in a timely manner, as that will fix their gas fee issue.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Solanas_17-hour_outage\"><\/span>Solana\u2019s 17-hour outage<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>On Sept. 14, the Solana network went offline for roughly 17 hours after enduring a denial-of-service disruption. At the time, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> account Solana Status explained a large increase in transaction load to 400,000 per second overwhelmed the network, causing it to start forking.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">1\/ Solana Mainnet Beta encountered a large increase in transaction load which peaked at 400,000 TPS. These transactions flooded the transaction processing queue, and lack of prioritization of network-critical messaging caused the network to start forking.<\/p>\n<p>\u2014 Solana Status (@SolanaStatus) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/SolanaStatus\/status\/1437856638279487493?ref_src=twsrc%5Etfw\">September 14, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>After Solana\u2019s engineers were unable to stabilize the network, its validator community coordinated a restart that brought it back to full speed. That same day, Ethereum layer-two rollup network Arbitrum One reported its sequencer went offline for roughly 45 minutes.<\/p>\n<p>The attacks failed to affect the Ethereum network, which to Domination Finance\u2019s Kolody was to be expected. Kolody noted that Ethereum is \u201ctotally decentralized and it is essentially impossible for the network to completely shut down,\u201d which is \u201cwhy gas fees can become insanely high.\u201d<\/p>\n<p>Ethereum&#8217;s resilience, he said, is part of the reason why it will \u201calways have users and developers building on top of it.\u201d Kraken Intelligence\u2019s Humiston noted the incident was a result of \u201cunprecedented demand\u201d that did not scare away investors.<\/p>\n<p>Humiston further noted that once the network came back online, the price of SOL rallied and returned to levels seen before the network went down. To the analyst, this \u201csuggests investors didn\u2019t see the incident as ruinous to Solana\u2019s overall narrative and value proposition.\u201d<\/p>\n<p>If anything, Humiston concluded, Solana\u2019s price action proved that the market \u201cacknowledges the difficulties in building a globally distributed system and expects growing pains as the network scales, evolves and innovates.\u201d To other experts, however, things aren\u2019t as clear.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_network_hiccup\"><\/span>A network hiccup?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While most experts seemingly agree that Solana\u2019s 17-hour outage was a small hiccup in a nascent network, others believe it may represent a problem that needs to be addressed before further outages occur.<\/p>\n<p>According to a Solana network explorer, the network has already <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/explorer.solana.com\/\">processed<\/a> over 39.6 billion transactions and currently processes over 2,300 transactions per second. Part of those transactions may, however, be in part \u201cthousands of critical consensus messages\u201d that all blockchains have but don\u2019t process as transactions.<\/p>\n<p>That\u2019s according to Justin Giudici, head of product at Telos Blockchain, who told Cointelegraph that these processes are \u201ctypically handled separately from on-chain transactions via a distinct communications channel \u2014 for good reason.\u201d<\/p>\n<p>Per Giudici, Solana\u2019s design approach \u201cresults in amazing scalability claims\u201d that are \u201centirely misleading.\u201d Giudici said that in real terms, a lack of separating critical processes \u201crequired for each Solana node to run from the real transaction which prevents the correct prioritization of CPU cycles,\u201d which led to the crash.<\/p>\n<p>Giudici sees Solana\u2019s 17-hour outage as a \u201cserious problem\u201d for the network, as he believes that if Solana sees \u201cenough real transactions,\u201d which he said are estimated to be \u201cas little as 200\u2013300 transactions per second\u201d these can \u201cout-prioritize the functioning of the networks core processes due to lack of separation of concerns in the networks architecture.\u201d\u00a0<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Interest_in_Solana_keeps_growing\"><\/span>Interest in Solana keeps growing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Interest in Solana has steadily been growing, as evidenced by its growing DeFi ecosystem that has steadily been supported with the launch of new NFT marketplaces and collections. Its cheap transaction fees make it an attractive alternative for retail investors, although institutions are also keeping an eye on it.<\/p>\n<p>Standard Custody &amp; Trust Company\u2019s McDonald revealed that institutional investors aren\u2019t the only ones interested in Solana. Per his words, the firm has had \u201ctremendous institutional interest\u201d to custody and stake SOL.<\/p>\n<p>Oscar L. Andrade, founder of Solana-based DeFi platform Bancambios, noted high profile projects built on Solana: Reddit co-founder Alexis Ohanian has teamed up with Solana Ventures to launch a Web 3.0 and social project investment fund while Brave founder Brendan Eich announced it will integrate with Solana on its privacy-enabled browser. Andrade told Cointelegraph:<\/p>\n<blockquote><p>\u201cReddit and Brave are onboarding millions of users into the Solana ecosystem because they realized it has the potential to help cryptocurrencies achieve mass adoption. Its near-free transactions and instant finality make the use of blockchain technology seamless.\u201d<\/p><\/blockquote>\n<p>McDonald predicted the boom will continue as institutional investors continue to invest in Solana and retail investors keep following that trend. Wall Street\u2019s interest in the cryptocurrency has been such that SOL became the third cryptocurrency to hit the Bloomberg Terminal, after Bitcoin (BTC) and Ether.<\/p>\n<p>Solana\u2019s features have indeed been attracting a plethora of users but that\u2019s not all helping it stand out. Its booming DeFi space is allowing retail investors to explore new funding options, decentralized exchanges and nonfungible tokens at accessible rates.<\/p>\n<p>Whether Solana will maintain its status as the go-to platform because of its features, or whether Ethereum 2.0 and ETH\u2019s layer-two scaling solutions will grow to overtake it remains to be seen.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/the-power-of-cheap-transactions-can-solana-s-growth-outpace-ethereum\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# The power of cheap transactions: Can Solana&#8217;s growth outpace Ethereum? &#8221; The top cryptocurrencies by market capitalization keep changing over time as the industry matures. Solana (SOL) has seen its value skyrocket so far this year and has been consistently processing over 2,500 transactions per second. The cryptocurrency\u2019s price, according to TradingView data, is&#8230;<\/p>\n","protected":false},"author":1,"featured_media":367950,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvNGU1MzIyNmMtMDdjNy00YTdkLTllOTgtYWVmZWVkYjFhZDYyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74868,92498,74880,74355,72927,4965],"class_list":["post-367949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-defi","tag-solana","tag-transactions","tag-adoption","tag-fees","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/367949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=367949"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/367949\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/367950"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=367949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=367949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=367949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}