There is a lot of discussion in the cryptocurrency community about whether Solana could beat Ethereum in 2024. Both networks have strong use cases and active developer groups. It would help us fully understand this possibility if we looked at the two blockchain networks side by side in a number of important areas, such as technology, ecosystem, scalability, adoption, and development plan. Here is an in-depth look at each factor that will help you figure out how likely it is that Solana will pass Ethereum soon.
1. Technology and consensus mechanism
Ethereum:
Consensus : Ethereum switched to a Proof of Stake (PoS) model when it got the Ethereum 2.0 update in 2022. This change made Ethereum much more energy-efficient and set the stage for future scale improvements like sharding, which are planned for 2024â2025.
Smart Contracts and Ecosystem: Ethereum was the first platform to use smart contracts, which made it the best choice for DeFi (Decentralized Finance), NFTs, and DApps. Ethereum Virtual Machine (EVM) is now the standard in the industry, and a lot of Layer 2 solutions, like Arbitrum and Optimism, depend on it to scale.
Solana:
Consensus: Proof of History (PoH) and Proof of Stake (PoS) work together to make Solana's unique consensus process work. This new method makes transactions go faster and allows for more growth without using Layer 2 options.
Transaction Speed and Fees: Solana is known for having a high throughput; it can allegedly handle 65,000 transactions per second (TPS), while Ethereum's current throughput on Layer 1 is only 30 TPS. Also, Solana has very low feesâoften less than a cent per transactionâwhile Ethereum's gas fees can be high, especially when the network is busy.
Downsides: Solana's network has had several outages in the past because of its aggressive optimizations and high level of complexity, which raises worries about its reliability. Even though transactions are slower on Ethereum, it has been shown to be more secure.
2. Scalability and Layer 2 Solutions
Ethereum:
Because Ethereum has trouble scaling, Layer 2 options like Optimistic Rollups (like Optimism and Arbitrum) and ZK-Rollups (like Polygon zkEVM) have become popular. These methods make the network much more capable and lower fees. By splitting the blockchain into smaller pieces (shards), Ethereum's future sharding system should make the network more scalable.
However, the fact that Ethereum relies on Layer 2s for scaling makes things more difficult for users. Users have to connect items between layers, which might be seen as a downside compared to how easily Solana can be scaled up or down.
Solana:
The main strength of Solana is that it can be easily expanded. It gives users a simple, quick, and cheap way to run decentralized apps (DApps) since they don't need Layer 2s. Solana is now more appealing to retail users who want something that is easy to use.
However, as we already said, its centralized hardware needs (because PoH is so demanding) and network stability problems have been a worry.
3. Developer Ecosystem and Adoption
Ethereum:
Developer Community: Ethereum has the largest developer ecosystem in the crypto space. As of 2023, Ethereum had over 4,000 active monthly developers, dwarfing all other Layer 1 blockchains.
Adoption: Ethereum is home to many of the biggest DeFi protocols, NFT marketplaces, and DApps. Many institutional players, including major banks and financial institutions, are building on Ethereum due to its first-mover advantage and well-established infrastructure.
Interoperability: Ethereum also benefits from the EVM compatibility across multiple blockchains and sidechains, expanding its reach and network effects.
Solana:
Developer Community: While smaller than Ethereumâs, Solanaâs developer ecosystem has been growing rapidly. In 2022, it had around 1,000 monthly active developers, but this number has been increasing thanks to the rise of Solana-native applications like Phantom wallet, Magic Eden (NFT marketplace), and various DeFi projects.
Adoption: Solana has seen notable adoption in the NFT and DeFi space, especially for use cases requiring fast and cheap transactions. Projects like Star Atlas (a blockchain game) and Serum (a decentralized exchange) are exclusive to Solana. The network has been increasingly attractive to developers and users frustrated with Ethereumâs high fees.
4. Security and Decentralization
Ethereum:
With more than 800,000 validators around the world, Ethereum is the second most open blockchain network, after Bitcoin. This decentralization is very important for safety and not being able to be censored.
Ethereum has a long history, and its Proof of Stake (PoS) system has been tested a lot, so it is very safe.
Solana:
Solana has about 2,000 validators, while Ethereum has a lot more. This makes people worry about control. Because you need more powerful tools to run a Solana validator, some people might not want to help decentralize the network.
Solana's network outages have made people wonder about its security and dependability compared to Ethereum, which hasn't had many big outages.
5. Institutional Interest and Partnerships
Ethereum:
Ethereum has been the platform of choice for businesses that want to get into the blockchain space. Visa, JP Morgan, and Microsoft are just a few of the companies that have built or teamed up with Ethereum-based solutions. Ethereum is still the best platform for enterprise-level apps and tokenized assets.
The release of staked Ethereum (stETH) has opened up new DeFi options for businesses, giving them more ways to make money while still holding ETH.
Solana:
Institutions are also interested in Solana, especially because it can do high-frequency trade. Big companies backed the network early on. Because Solana focuses on speed and being able to grow, it has drawn projects like Solana Pay, which uses blockchain technology to make payments easier.
However, Solana is still not as widely used by institutions as Ethereum.
6. Market Sentiment and Trends
Ethereum: Ethereum is still seen as the best choice for smart contracts and independent apps by the market. Since ETH staking payments will be available after the merger, Ethereum is set up to be an asset that makes money. Ethereum's ecosystem is still strong against rivals, and the work of its developers ensures that new ideas keep coming up.
Solana: Some people see Solana as an alternative to Ethereum that comes with a lot of risk and a lot of profit. Retail users and DeFi traders like it because it has lower fees and deals are faster. But worries about the stability of the network and the success of Ethereum's Layer 2 scaling could slow Solana's growth.
7. 2024 Catalysts and Outlook
Ethereum:
Sharding and Updating to Ethereum 2.0: If Ethereum is able to successfully adopt sharding in 2024, it will greatly improve its ability to scale and handle transactions, making it more competitive in terms of speed and cost.
Layer 2 Maturity: As Layer 2 solutions get better, Ethereum's fees will go down and transaction times will get faster. This will make Ethereum stronger against competitors like Solana.
Solana:
Made the network more stable: Solana will stay a strong contender for fast and cheap transactions as long as it can make its network more stable and keep growing without frequent outages.
The number of NFTs in Solana is growing quickly, and new DeFi projects are being built on the platform. If Solana does well in 2024 with games and Web3 apps, it could speed up its acceptance.
Institutional Use Cases: More partnerships and adoption by payment companies could make Solana a more serious competitor to Ethereum.
Can Solana Overtake Ethereum in 2024?
There are some good things about Solana, like faster trades, lower costs, and ease of use. But it probably won't beat Ethereum in 2024 for a few reasons:
1. Ethereum is still the leader because it has the most developers, the most institutional backing, and the strongest DeFi ecosystem.2. Upcoming changes to Ethereum, such as sharding and Layer 2 improvements, will fix its problems with high fees and slow speeds, making Solana less useful.
3. People have had trouble trusting Solana, and until it can show that it can work well without regular outages, it will be seen as riskier.
4. Big organizations like Ethereum better than Solana because it is safer and less controlled.
In short, Solana will keep growing, but Ethereum is likely to stay ahead because its ecosystem is bigger, its technology is getting better, and more institutions are supporting it.
