Ethereum (ETH) vs SOlana (SOL): Which Is a Better Network?

Ethereum and Solana have been rival cryptocurrency networks for years. They are both top proof-of-stake (PoS) networks that support web3.

However, there are major differences between the two, and they have different strengths and weaknesses you should know about. In this guide, we compare these two top cryptocurrency networks to help you choose which one to use.

Whether you’re a developer looking for the best network to use or you’re just a crypto investor looking for the best investment, this guide will give you the needed guidance to make the right choice, so let’s get into it.

What Is Ethereum (ETH)?

Ethereum is the leading crypto network for smart contract and decentralized application (dApp) development. It has a strong reputation in the crypto space, probably because it was the first network to support such features.

Initially launched as a proof-of-work (PoW) network, Ethereum recently migrated to become a proof-of-stake (PoS) network.  The decision to migrate was in a bid to curb challenges such as low scalability, slow transactions, and high transaction cost.

However, Ethereum still faces the same problem even now. This is what caused newer networks like Solana to emerge as competition that offer better services. 

Ethereum’s native token, ETH is a utility token that is used to pay for transaction fees. It is also used as the staking token to secure the network, since Ethereum is now a PoS network. ETH also qualifies its holders to vote on proposed changes to the Ethereum network.

It is also a popular investment token, as it is the second largest asset by market capitalization after Bitcoin.many investors vouch for the future of ETH, as they see great potential growth in the token.

There have been several upgrades to improve the Ethereum network network, but not much has changed. However there are more scheduled updates which experts believe could set the project on the path of growth when implemented.

ETH has a circulating and total supply of 120 million tokens, and that is also the maximum supply. As the token is pre-mined, this is all the number of tokens there is that can ever exist, giving it a limited supply indeed.

What Is Solana (SOL)?

Solana is the PoS network fondly referred to as the Ethereum Killer. It is a newer network than Ethereum, but has improved on what Ethereum has to offer. Solana is far more scalable than Ethereum, so transactions are faster and the fees are lower.

The network uses the traditional PoS network consensus but also has an additional proof-of-history (PoH) algorithm that gives it extra support. The PoH algorithm makes Solana more flexible than other PoS networks and makes it more scalable by adjusting its capacity to take more or fewer transactions as the need arises.

Solana has a native token, SOL, which is used to power its ecosystem. It is used to pay for fees of all kinds on the network, and also for staking to secure the network by validators. SOL is also the governance token for the network, empowering holders to vote on changes to be made on the network.

Unlike ETH, SOL has an infinite supply of tokens. However, there are only 460 million in circulation currently. More SOL tokens will continue to be released into circulation as time passes, making it an inflationary token. 

Which Is Better?

Solana is no doubt a fast and scalable network for building smart contracts and decentralized applications. However, Ethereum is much more secure and has a stronger user base than Solana.

Therefore if you’re seeking a fast network for sending funds or doing other things at a lower cost, Solana is a great choice. As an investment asset, SOL is also a good choice as it has proven recently. 

Considering that it is an inflationary asset though, Ethereum, with a relatively small, limited supply is a better investment in the long term.