Avalanche (AVAX) (1) is a smart contracts platform that was initially conceived as a solution to some of Ethereum’s (ETH) biggest problems: high gas fees and slow transactions. It primarily functions as a swift, decentralized global exchange for various types of assets powered by smart contracts.
The AVAX network is known for offering the fastest transactions in the industry –– most transactions resolve in under a second. Lightning-fast transactions and a flexible system of three interlocking blockchains set AVAX up to be a major ETH competitor (2).
AVAX is a Proof of Stake (POS) network, which makes it more eco-friendly than legacy coins like Bitcoin (BTC). It has a supply cap of 720 million, and a portion of the supply is burned with every transaction, which increases scarcity and drives up value. AVAX has a generous staking reward of nearly 12% with a minimum lockup of only two weeks. Inflation for AVAX is one of the lowest in the industry by design.
Solana (SOL) was designed with similar goals in mind to AVAX (3), to improve upon the flaws of ETH to build a faster and cheaper global DeFi platform. They’ve done a good job so far, and they’re now recognized as one of the fastest and cheapest ways to move assets.
SOL is a POS network with a total supply of 489 million tokens with 16 million in circulation (4). The SOL team holds nearly 25% of the circulating supply, which means that SOL isn’t as decentralized as many users may prefer, but that could change over time. SOL is slated to have an inflation rate of less than 2% by 2031 (5).
So, which is better: Solana or Avalanche (AVAX Vs Solana)? Each project has a different goal. AVAX is currently on a trajectory to replace ETH as the go-to smart contract platform for modern developers, while the endpoint of SOL could potentially be a DeFi alternative for everyday transactions. Both have great growth potential and are unlikely to go away.
Polygon (MATIC) (6) is an Ethereum scaling platform built on the Ethereum Blockchain, but with a blockchain ecosystem of its own. It’s a smart contract platform built on a larger smart contract platform, and it was designed specifically to help Ethereum scale and remain modern.
MATIC enables dApp developers to more easily build scalable and more affordable dApps without compromising security. MATIC operates on a POS framework and has a total supply of 10 billion tokens with over 50% currently in circulation (7). 1.2 billion tokens are allocated as a staking incentive, with the incentive reducing every few years as the network scales.
Compared to AVAX, MATIC is considered more centralized. Also, while AVAX seeks to replace ETH, MATIC seeks to improve it. That means that, if you’re rooting for ETH in the long run, then MATIC is a good supplementary token to add to your portfolio.
In comparison, AVAX is leaner, more decentralized, and faster than MATIC. The AVAX ecosystem is a direct competitor to MATIC, with a more streamlined structure and focused goal. For anyone betting against ETH, AVAX is the way to go.
The DFINITY Foundation (8) is a non-profit DeFi organization working hard to build a smarter, faster internet on blockchain by leveraging efficient smart contracts on a decentralized framework that “can serve interactive web content directly to end-users without intermediaries, providing for the creation of systems and services that run entirely from a blockchain” (9).
The DFINITY project uses the Internet Computer Protocol (ICP) token for network governance. The network features lightning-fast transactions of approximately 2 seconds and uses inflation as a way to reward network participants. Then, when ICP users transact on the network, some ICP is converted to another currency and then burned. This deflates the currency and makes the remaining tokens more valuable.
ICP’s goal is to build a better, safer, and more stable internet, and it’s making significant headway toward its goal. As a token, it’s more decentralized than competitors like MATIC and SOL, and the DFINITY forum is easily accessible and thriving with contributors from all over the world.
ICP is faster and more decentralized than SOL, but it has both built-in inflation and deflation, while SOL only has built-in deflation. That means that crypto investors who want to protect the value of their assets are more likely to consider SOL than ICP. These two projects aren’t in direct competition with one another –– they have different goals and are growing separately to accomplish them.
What is NEAR crypto? NEAR is a smart contract platform that aims to accelerate the global transition to Web3 through compatibility, not competition (10). NEAR interoperates with Ethereum, Polkadot, Cosmos, and several other existing networks to enable data transfer across blockchains. Also, NEAR is fast, affordable, and carbon-neutral.
The NEAR token has a market cap of $21 billion with over 580 million tokens in circulation. Inflation is set to 5%. Coin holders can use the token to pay transaction fees, store data on the blockchain, stake and earn, and cast votes.
NEAR’s greatest accomplishment has been the bridging of previously incompatible blockchains, and it has big plans to continue building a better Web3.
Many people are asking, “Is NEAR a good investment” or wondering if Solana is the future of crypto. What is important to remember is that these are massive projects with different goals that are both worth watching.
Cosmos (ATOM) (11) is one of the older blockchains on the market. It was one of the earliest networks conceived to create interoperability between existing blockchains through the creation of new blockchains that can communicate in between. While that means that it has a lot of completed development, it also means that other networks have emerged and eclipsed some of its initially groundbreaking features.
ATOM is a POS network with a market cap of $6.4 billion with no max supply, which means that inflation can rise as high as 20%. It’s known for generous staking rewards, but those rewards can be offset by high inflation. By comparison, Solana is a deflationary currency that will increase in value over time by scarcity.
Cosmos and Solana have similar goals –– to provide a framework for interoperability and the deployment of new blockchains. Between the two, ATOM sees wider adoption, but SOL has faster transactions and is more decentralized.
Polkadot (DOT) (12) is a POS blockchain interoperability protocol that is often seen as both a successor and competitor to ATOM. Polkadot has more validators than Cosmos, which means it’s more secure, but by extension, it’s also ten times slower than Cosmos.
When it comes to Solana vs Cosmos, Solana seems to do most of what Cosmos is doing just a little bit better –– though not in all cases. However, Solana’s deflationary nature may make it a better financial bet than Cosmos in the long run.
How does Solana compare to Polkadot? Polkadot is like the younger sibling of Cosmos, serving a similar purpose with different strengths and weaknesses. Like ATOM, DOT has no fixed supply, so it operates with roughly 10% inflation each year. For this reason, many crypto investors may prefer SOL for its deflationary nature.
Solana appears to have greater potential than Polkadot in the long run, however, Polkadot does have the benefit of an older blockchain –– and one that specifically works with Ethereum to solve some of Ethereum’s problems. This means that, if ETH wins the crypto race, DOT will likely remain useful in the long run, while SOL may take more of a niche role.
Will Solana overtake Ethereum? It’s possible, but it’s also possible that it will operate alongside it. Long-term, Ethereum might be the primary framework for Web3, while Solana may become a primary DeFi tool for the next generation
Another strong contender in the crypto race is Cardano (ADA) (13). ADA and SOL were two of the top-performing cryptocurrencies in 2021. Both seek to improve upon the flaws of ETH to build a stronger, safer, faster, and more affordable blockchain.
Cardano operates on a POS network that the developers claim is 1.6 million times more energy-efficient than Bitcoin (14). Cardano’s native coin ADA is used for governance, staking rewards, as an incentive for node operators, and for paying gas fees on the platform.
While Solana seeks to provide a low-cost platform for asset trading, Cardano is building a scalable blockchain upon which developers can build dApps, DAOs, NFTs, and more. The future of crypto has room for both projects, and both have a long way to go to accomplish their goals.
Ethereum (15) was developed to build a blockchain that could be useful for more than storing money. Ethereum’s development has led to the creation of entire new blockchains, NFT projects, dApps, and DAOs.
Ethereum paved the way for Web3, and currently, AVAX, SOL, and ADA are in a race to perfect it –– until perhaps a new project comes along to upset them. The future is bright for both AVAX and ETH, but AVAX is currently showing tremendous growth and promise in comparison to the slower, more expensive, and far less eco-friendly Ethereum network.