Will ADA and SOL Dethrone Ether in the Coming Years?

Surreal as it sounds, this question may not be all that farfetched. Cardano and Solana were often referred to as the Ethereum Killers, as they were launched to make up for the shortcomings of first-generation blockchain technology. Furthermore, Ethereum was very close to hitting mining “Ice Age”, also referred to as the difficulty time bomb. Although the Ethereum London update has temporarily defused the “bomb” with a new proof-of-stake (PoS) model, we wonder what lies ahead for Ethereum’s legacy…

ADA and SOL: Next Stop, Moon?

August ChangePriceVolume 
BTC17.4%18.1%
ETH22.1%-1.1%
SOL218.3%1128.0%
ADA106.8%182.5%

Source: Bybit Insights

The price of SOL and ADA in August has surged by 218.3% and 106.8% each, surpassing the growth rate of BTC and ETH. That aside, Cardano’s ADA also overtook Binance’s BNB as the third-largest cryptocurrency by market cap. But what does the price surge signify? 

The uptick in price and volume can be seen as a recognition of the coins by the retail and institutional investors. Most evidently, Solana’s investment-related products have received $7.1 million from institutional investors, according to CoinShares’ latest “Digital Asset Fund Flows Weekly”. This cemented the position of the Ethereum killer in the world of crypto, enabling a new horizon for decentralized applications.

What’s more? With the capability to handle up to 266 transactions per second (TPS), Cardano does appear to have a speed advantage over Ethereum. By replacing mining with proof-of-stake concept, Cardano is also known for its capabilities in greening blockchain technology. With the latest Alonzo update, Cardano continues to flex its muscles — this time, on its smart contract. Although there is much hype and wow around the long-awaited update, the real use case is still currently under development. 

Processing up to 50,000 TPS with just a few dollars, Solana follows hot on both Cardano and Ethereum’s heels in this race to the top — when it comes to speed and cost, at least. It’s also one of the few altcoins that have partnered with institutional-grade data oracle Pyth Network. However, can Solana’s native token SOL be used to buy your good ol’ slice of pizza? Each of the digital assets has its pros and cons, perhaps, the coexistence of the coins will bring about more benefits than bitter competition. 

The price movements of SOL and ADA have been moving in tandem for the past three months — showing a correlation of the coins with ETH. Total value locked (TVL) in SOL grew to $2.9 billion, while ETH’s TVL also surged to a massive $153 billion during recent DeFi spikes — signifying signs of codependency of the networks. 

Source: Bybit Insights

Ethereum Buckles Up for a Bumpy Ride

ETH is hailed as the Queen of Crypto, as it has laid the foundation for NFTs and DeFi projects to thrive. Most notably, ETH has supported more than $1 billion in lifetime sales of CryptoPunk NFTs. 

However, Ethereum is currently facing a setback: Weekend bugs hitting Ethereum’s client network, Geth; if unsettled, the bug will potentially spawn a double-spending attack on 74% of the Ethereum network. This may have dented some investor sentiment, but proponents remain undeterred. 

ETH’s Puell Multiple trended higher than BTC for the last several weeks. This indicates that ETH is more likely to reach a market top than BTC, thus, bringing in more value for the investors. Furthermore, divergence in Puell Multiple also shows that ETH is gaining sovereignty from BTC.

Eth2 upgrade, which is set to be completed by late 2022, will also offer turnkey improvements including greater scalability, security, and sustainability. For instance, it will be able to process more transactions with less energy, thereby attracting institutional users who are keen on adopting blockchain and meet sustainability goals. 

More importantly, Eth2 upgrade aims to improve the Ethereum network’s security through the transition to the PoS model. The model aims to deter coordinated attacks such as the majority stakeholder attack.

(Ether)nally the Hot Favorite?

With the recent paradigm shifts to the PoS model, alongside with implementation of Layer-1 solutions, the crypto networks can look forward to an intricate balance between the blockchain trilemma: scalability, security, and decentralization. Enthusiasm abounds for a better, safer and cheaper network. Yet even as the overall market share claimed by Ethereum’s legacy slowly diminishes in the light of Solana and Cardano, a world without Ethereum remains difficult to imagine. Perhaps dominance is an overrated myth, and true triumph lies in the intricate coexistence of robust networks; a true display of decentralization.