What are Avalanche & Solana?
Avalanche has been called “the Ethereum killer.” They have promised to be 100 times faster than Ethereum and to become the new most popular blockchain for smart contracts. Besides being another decentralized platform, their coin, AVAX, can be staked with annual rewards of nearly 12%. Also if you want to stake for a short term, the minimum is only 2 weeks.
They have a mission to provide custom blockchains to solve the quandary of decentralization and scalability.
Avalanche has designed THREE different blockchains:
- C-Chain, and
They all work together (interoperable) to address these problems.
On the other hand, Solana is a cryptocurrency platform that is designed to run decentralized apps and provide solutions through hybrid consensus. SOL (their native token) is used to pay staking transaction fees as well as can be used as a peer-to-peer digital value.
Several exchanges like Coinbase, Coinswitch, and Binance offer SOL tokens.
Solana has scaled up to completing tens of thousands of transactions per second and has close to zero fees. They endeavor to keep transactions extremely fast, which in turn lowers congestion and keeps fees low.
How are Avalanche & Solana similar?
- OPEN-SOURCE. Both are open-source platforms for launching Dapps.
- SCALABILITY. Each project focuses on bringing decentralized finance to a global level with less congestion.
- MULTI-USE. They are both cryptocurrencies and utility tokens with many use cases: securing the network via staking, payment of things like gas fees, governance participation, and peer-to-peer transactions.
- FINITE SUPPLY. AVAX has a cap of 720 million and SOL caps at 489 million.
How are Avalanche & Solana different?
- BLOCKCHAIN. Avalanche utilizes three different blockchains to spread out its tasks; Solana uses one blockchain.
- CONSENSUS. AVAX uses a Directed Acyclic Graph ( DAG ) protocol to gain consensus and SOL uses a hybrid consensus: Proof of History ( PoH ) combined with Proof of Stake ( PoS ).
- INTEROPERABILITY. Avalanche can share and communicate within their three blockchains; Solana is not interoperable.
- SPEED FOCUS. Solana can PROCESS 50,000-65,000 per second; Avalanche can PROCESS 4,500 smart contracts in under a second.
Tokenomics SOL & AVAX
Both Avalanche and Solana have a short history when comparing them to Bitcoin or even Ethereum.
- Supply Cap: 489 million
- Token: SOL. 47.6% of tokens were distributed to seeding, founding, and team members; the remains have been released to the public.
- Incentives: Staking that automatically compounds interest.
- Inflation: Spanning from 2020 to 2031, Solana has an initial inflation rate of 8% which descends yearly into a long-term outlook of 1.5%.
- Supply Cap: 720 million
- Token: AVAX. 60% of tokens are for public and staking opportunities. When a user transacts, the amount is burned, increasing the scarcity, and thus value.
- Incentives: Staking rewards up to 11.57% with a minimum of two-week lock up.
- Inflation: Low yearly inflation in comparison to other competitors such as DOT (10% yearly)
However, some numbers might have changed when you read this.
In summary, Solana has increased almost 9,000% in the same time as Avalanche increased 1,200%. Also, Solana has had softer corrections than Avalanche, despite the lower returns.
The conclusion is clear: Solana is better than Avalanche, historically speaking.
However, historical performance does not guarantee future performance. Moreover, it’s often a better bet to go with a fundamentally strong project with a lot of room to grow.