Could Solana Overtake Ethereum in 2022? What Would That Mean for Solanax?
Hello SOLDiers, we hope you’re doing well!
At Solanax, we’ve made a lot of big and important strides in 2021. This wouldn’t have been possible without the fast growth of the platform we’re built upon, Solana. It’s helped fuel our development and expand our user base.
As we’ve discussed many times before, we chose Solana over Ethereum for a variety of reasons, notably Solana’s speed, affordability and scalability. It’s the perfect platform for building a cross-chain DEX.
As we embark on 2022, we’d like to dive deeper into what this year could hold for Solana. Specifically, we’d like to analyze whether Solana can overtake Ethereum? And we’ll talk about what that means for Solanax.
Let’s jump right into it.
Solana Is Faster Than Ethereum — And Platform Activity Is Growing at a Faster Rate
Predicting market trends isn’t an easy task to accomplish. However, we can look at the on-chain activity and extract some insights.
As of December 2021, here’s how many projects were on each blockchain (source):
- Ethereum has more than 3,000 projects.
- Solana has more than 400 projects.
While it may seem like Ethereum holds a large advantage, keep in mind that Solana is much younger. Having just launched in 2020, Solana is growing at a much faster rate. We anticipate more projects will opt to build on Solana instead of Ethereum, for similar reasons as ours. It’s arguable that Solana could have 1,000 to 2,000 projects on its platform by the end of next year.
Another thing to consider is network capability. While Ethereum 2.0 should be much faster, Solana currently can process roughly 50,000 transactions per second. Currently, Ethereum is only capable of processing between 15 and 45 transactions per second.
Considering the platform activity growth rate and network speed, it’s certainly possible that Solana could rise to be a formidable competitor to Ethereum in the coming years.
Price Action: Solana vs Ethereum
Let’s give credit where it’s due: Ethereum went from $738 (MC: $87B) on 1/1/2021 to $3,767 (MC: $448B) on 30/12/2021. It’s the second most recognizable cryptocurrency in the world and it serves as a platform for the vast majority of NFT projects.
Without a doubt, Ethereum holds a significant position in the crypto market.
As mentioned, Solana has chosen to focus on speed and cost efficiency to fuel its growth. This is what gives it a technical edge over Ethereum.
Yes, the market numbers remain in favor of Ethereum. However, Solana grew from $1.85 per SOL to $175 in 2021 — that’s a 95x increase! Ethereum’s impressive 5x in 2021 doesn’t stack up to Solana’s performance.
Simply put, if you want to make money investing in crypto in 2021, Solana was a much better choice than Ethereum.
Moreover, as we have stated on many occasions, there is much more utility to be found in Solana over Ethereum. Solana is vastly superior in terms of transactional speed and cost. While you’ll sit there and wait minutes for an ERC-20 token to reach a recipient’s address, transactions on Solana finish almost instantaneously.
These advantages should drive more users to Solana, which should create buy pressure for SOL. This could mean that Solana will continue to deliver better ROI for investors — at least until Ethereum fixes its speed and scalability issues.
What About NFTs?
2021 was the year of NFTs, with total sales hitting $22 billion. The blockchain that becomes the top destination for NFTs will be in a great position to become the dominant blockchain in the long run.
Yes, Ethereum is the NFT champion for now. But Solana is a budding platform for those as well, with exciting projects like SolPunks and Bold Badgers choosing to build on Solana. Precisely because of its rapid growth and superior user experience that it offers, we feel optimistic that more NFT projects will be built on Solana and new use cases for the technology will be discover on the platform.
It’s Not All About Market Cap
The price of a token isn’t the sole determinant of its worth. Activity, user base, and value delivered are vital too.
For example, active Apple iPhone users in the world comprise around 14% of the market share and Apple’s market cap is around $3 trillion USD. On the other hand, 20% of smartphone users have Samsung phones and Samsung is “only” a $441 billion company. While Apple is bigger in terms of market cap, Samsung has more users, activity, and arguably delivers more value to society than Apple.
Even if Solana’s numbers don’t reach those of Ethereum, the possibilities that Solana offers seem quite attractive.
At the end of the day, what matters most is that Solana continues to grow and improve. If that happens, we’ll be in a good position at Solanax.
What All This Means for Solanax
As Solana grows in its user base, projects on the platform will become more visible to the crypto world. This will have a positive impact on Solanax, as our DEX is built on Solana. It’s like a trickle-down effect.
Moreover, the Wormhole Bridge that Solanax will offer is something that could attract a lot of new users into our ecosystem. The Wormhole Bridge allows people to access their Ethereum assets from Solanax’s network and use them on our DEX.
Furthermore, as Solanax is a DEX, we can position ourselves as the go-to platform for DeFi activities in the Solana ecosystem.
All this could have a cascading effect on our growth:
- Users move from Ethereum to Solana → They come into Solanax because of the Wormhole Bridge and DeFi options → Solanax grows→ Solana thus has more users.
We do not claim to be able to predict the future with absolute certainty. But given the trends that we’re observing, Solana will continue its upward trajectory — and therefore so should Solanax.
Solanax is a Solana-based automated market maker (AMM) exchange providing lightning-fast trades, pooled liquidity, and other income-generating features. Solana was chosen as the underlying blockchain to facilitate low-cost, high-speed transactions. It is a permissionless, high-performance blockchain based on the Proof of History consensus (PoH).
Given the advantages that Solana offers when compared to other blockchain ecosystems, it is a popular solution among investors, users, and developers. Ethereum’s Proof of Work Consensus is slow, hard to scale, and comes with high gas fees which were exacerbated by its account-based system. Where Ethereum has failed to live up to the community expe, Solana quickly proves to be a viable alternative.
Solanax will utilize the cross-bridge Wormhole to connect to projects and digital assets existing on the Ethereum blockchain, facilitating adoption and allowing the crypto community to seamlessly move tokenized assets from one blockchain to another, improving interoperability and liquidity setup.
It is faster and cheaper; Solanax offers on-chain liquidity; traders will have more control over their trading activities; an integration of Wormhole for fusion with tokenized assets on the Ethereum blockchain, and much more.
For more details on the project at the forefront of the DeFi evolution, visit: