The fall of Solana should favor Cardano, but it is not the key to turning the altcoin into the “Ethereum Killer”
Certainly, Solana (SOL) is one of the cryptocurrencies hardest hit by the FTX crash. The competitor to Ethereum (ETH) experienced a large loss in market capitalization shortly after the announcement of the insolvency of the Sam Bankman-Fried (SBF) companies.
Why did that happen?
SBF has always proven to be a great supporter of the altcoin. Therefore, their ventures had strong investments not only in Solarium but also in tokens of the cryptocurrency ecosystem. Just to give an example, SBF acquired $1.2 billion worth of SOL tokens through Alameda.
Additionally, the trading company reportedly owned $1.15 billion in Solana and was accused of selling its altcoin holdings to prevent the fall of FTT, the FTX token.
These factors contributed to SOL undergoing a strong correction and dropping out of the top 10. In this sense, the question arises: is Cardano’s turn to shine? Will the altcoin finally stand out as the “Ethereum Killer”?
Differences between Cardano and Solana
While both are platforms developed to improve the field of smart contracts, Cardano and Solana have some differences.
Solana was designed to make it easy to create decentralized applications (dApps). For this reason, it was developed to improve scalability by introducing a proof-of-history (PoH) consensus combined with a proof-of-stake (PoS) consensus.
Cardano, for its part, was developed with the philosophy of being a payment alternative in places where access to the banking system is extremely limited. In addition to being a smart contract platform with low fees and fast transactions, the altcoin stands out for its research-based development and offering ADA-free engagement for users.
While SOL’s network development language is Rust, ADA’s is Plutus, inspired by Haskell.
What is the best “Ethereum Killer”?
The debate about the potential for Solana and Cardano to outperform Ethereum is not a new one. However, that reality is a long way off for both altcoins.
Ethereum remains the leader in smart contracts, with much higher NFT volume and total value locked (TVL) in DeFi than its competitors. In this sense, it can be said that, before competing directly with ETH, the competitors of the main altcoins in the market are competing with each other.
As for Solana’s TVL, it saw a 54% drop between November 8 and 21, according to data from DeFi Llama. Cardano’s, on the other hand, had a 22% drop in the same period.
Even considering that TVL is calculated on volatile assets and that, since the aforementioned date, the cryptocurrency market has undergone a strong correction, Cardano still overcome Solarium.
FTX bankruptcy aside, Cardano still has the advantage of having a network that doesn’t go offline. Although the ADA team is accused of delaying its deliveries, the cryptocurrency has managed to prove its resilience among Ethereum’s competitors, even if its prices are not the most attractive since its high record seen in 2021.
The collapse of a major Solana backer was just what the market needed to put the cryptocurrency, which has seen eight network outages since its launch, on the sidelines, at least until this chaos ends.
However, while Cardano is a few steps ahead of its rival, the demand has yet to see its network reach its usage limit. As such, the altcoin needs to stand the test of time to prove that it can rival Ethereum.