Cardano and Solana are among the smart contract platforms that are growing in popularity the most. The term “Ethereum Killer” is often used for describing blockchains that are trying to provide a better alternative to Ethereum. In most cases, this means providing similar smart contract functionality while offering better transaction throughput and lower costs.
In this guide, we will compare the Cardano and Solana blockchains in terms of TPS, consensus mechanisms, market caps, technologies they have, and more. We will attempt to determine which of these two “Ethereum Killers” is more worthwhile to invest in.
What is Cardano?
Cardano is a blockchain project founded by Charles Hoskinson, who also played a role in the early days of the Ethereum project. The native coin of the Cardano blockchain is called ADA. The consensus mechanism that Cardano uses is Proof-of-Stake, which consumes less energy than Proof-of-Work.
The Cardano mainnet was launched in September of 2017. Some of the project’s goals are to provide financial services to people that have difficulty accessing the banking system, to decentralize financial services, and to expand the benefits of blockchain use. The Cardano project has been especially active in the African market. For example, the project has collaborated with the government of Ethiopia..
The Cardano mainnet gained smart contract capability with the Alonzo upgrade in 2021. This enabled DeFi protocols to be built on the Cardano network and enabled the network to host new building blocks of the Web3 ecosystem, such as new dApps and P2E (play-to-earn) games. One of Cardano’s goals is to be the most sustainable and eco-friendly blockchain platform. When Ouroboros is improved with an upgrade called Hydra, the scalability of the network is expected to increase significantly.
Ouroboros consensus mechanism
The Ouroboros consensus mechanism, created by Cardano developers as a result of peer-reviewed and academic research, is a more efficient Cardano-specific implementation of Proof-of-Stake. According to Charles Hoskinson, this model is 1.6 million times more energy efficient than Bitcoin. Using a combination of combinatorics, mathematical game theory, and cryptography, Ouroboros supports a sustainable, provably secure, and integrated community node network.
- Cardano has a fairly large network of validators, leading to relatively strong decentralization
- The network is energy efficient and has been running reliably so far
- Has a strong ecosystem backing it with entities like the Cardano Foundation and Emurgo
- Cardano’s smart contracts are based on Haskell, a niche programming language that not many developers are familiar with
- The project is known for its “slow and steady” approach, which can be a negative in the fast-moving blockchain space
- Still requires some upgrades before it can meaningfully compete with platforms like Ethereum
What is Solana?
Solana is a blockchain project founded by former Qualcomm software engineer Anatoly Yakovenko. The feature that puts Solana in an advantageous position against Cardano and other competitors is the blockchain based on the Proof-of-History model.
The Proof-of-History combined with Proof-of-Stake has brought the ability to process transactions at much higher speeds and lower transaction costs compared to the consensus mechanisms of other blockchains. In fact, Solana has achieved a network that is fast enough to compare with the speeds of huge payment firms such as MasterCard.
Launched in 2020, Solana hosts thousands of dApps in many different categories, primarily DeFi, on the blockchain. The project, which managed to increase its market cap very quickly in 2021, is notably supported by FTX, one of the major cryptocurrency exchanges, and by many venture companies.
Proof of History (PoH)
Solana developers have developed an innovative timestamp format to provide reliable and fast synchronization between nodes and validate transactions. Proof-of-History provides a reliable method for nodes to validate transactions on the network.
Proof of History is not a stand-alone consensus mechanism, it is a protocol that supports a Proof of Stake (PoS) consensus mechanism.
- Solana offers the lowest transaction fees compared to its competitors
- Solana is the second most used blockchain after Ethereum when it comes to NFT marketplaces, NFT trading, and new NFT collections
- Solana is also environmentally friendly, and the Solana Foundation aims to make this network carbon neutral
- The Solana network has had numerous outages, leading to reliability concerns
- Running a Solana validator requires expensive computer hardware
Solana vs Cardano – which is better?
In the Solana vs. Cardano comparison, we should know that both blockchains offer many useful alternatives to real-world problems and Ethereum’s problems. Both blockchains contain very advanced technologies and their native coins saw major price increases in 2021.
In terms of decentralization, Cardano currently appears to have the upper hand, as becoming a validator on the Solana blockchain is much more difficult.
Another thing to consider in the SOL vs ADA comparison is that the Solana network has experienced outages more than 7 times since launch. Solana users had to wait for hours to complete their transactions multiple times.
Although Cardano is developing projects for the adoption of the use of blockchain in the world, the concrete steps taken in this regard are quite limited. Although the goals of both blockchains are very good, the speed at which they’re reaching their goals leaves a lot to be desired.
If you are more interested in use cases like storing credentials, supply chain management and the use of blockchain in administration processes, then Cardano is probably more interesting to look at.
Transactions per second (TPS)
According to developers, the Solana blockchain could theoretically reach the capability of processing 700,000 transactions per second. Cardano, on the other hand, could process up to 1 million transactions per second after the Hydra upgrade.
While the theoretical limits can be interesting to discuss, Solana is currently much faster than Cardano. The Solana TPS (transactions per second) is currently around 65,000, while the Cardano TPS tops out at around 250.
On Solana, the average transaction fee is $0.0015, and the transaction latency is around 0.4 seconds, while on Cardano, the average transaction fee is $0.25, and the transaction latency is around 10 minutes.
Is Cardano a good investment?
Cardano’s work to increase blockchain adoption has made it one the most used blockchains for solving real-world problems. IOHK’s appetite for developing this blockchain and the perseverance of the community could make Cardano a good investment.
Before making a Cardano price prediction, it’s important to consider the factors that are affecting the broader cryptocurrency market. A few conditions need to be met for the crypto market to start a new bull rally. Improvement in macroeconomic conditions will be achieved by decreasing inflation and gradually lowering the interest rate. With the Bitcoin halving approaching, the Cardano price could see a significant increase after the crypto bear market is over.
Is Solana a good investment?
The Solana ecosystem, which is one of the biggest actors in the market, especially in the NFT and DeFi sectors, continues to increase its market share in both sectors. The fact that Solana has always been in the top 10 most valuable cryptocurrencies since August 2021, when it started to show its potential, has made it a good investment.
Solana vs. Cardano – the bottom line
Both Cardano and Solana have an advantage over each other in terms of certain features. Solana is a notable smart contract platform for its unique PoH protocol and its place in the NFT industry, while Cardano stands out for its strong decentralization, long history and real-world uses.
Cardano leverages peer-reviewed academic research and pioneers’ decentralization. Solana is both faster and cheaper, but its effective level of decentralization could certainly be improved upon. When choosing one of the two cryptocurrencies, you can decide according to your experience, needs and belief in the projects.