However, some blockchain projects like Terra and Solana seem to have the scalability issue solved, and both of these are starting to gain momentum in the cryptocurrency economy. Both might eventually be valued more than ETH.
Here is what you need to know.
Solana is a blockchain that is programmable and powered by the SOL coin. Its core innovation is a special consensus mechanism that blends the proof of history protocols and proof of stake (PoS) to make network throughput faster. In fact, Solana could theoretically manage 50,000 transactions each second while achieving finality in about 13 seconds. By comparison, ETH manages less than 15 transactions per second and could take up to about six minutes to finish those transactions.
That makes Solana a much more scalable crypto than its predecessor was, and in turn, that scalability has helped keep transaction fees lower. In fact, the avg. fee on Solana’s blockchain is just a fraction of a cent, while the avg. transaction fee on ETH now sits close to $20. Not surprisingly, the promise of cheap and fast transactions has the cryptocurrency community excited, so much so that the Solana crypto ranks as the sixth-biggest DeFi ecosystem, with $8.5 billion that has been invested on the blockchain.
Better yet, Solana has recently announced its Solana Pay protocol, which will let consumers send digital currencies like USD Coin directly to the merchant accounts. And because of those transactions being powered by the Solana blockchain, they cost only a fraction of a cent and will be settled almost instantly.
As DeFi and dApps products on Solana are continuing to gain popularity with investors and consumers, demand from the SOL coin should increase, driving its price even higher. And on down the road, it is not hard to think this innovative blockchain will surpass Ethereum.
The Terra blockchain features two main coins. The first being the Terra stablecoin, which could be pegged to different fiat currencies. For instance, TerraUSD (UST) is tied to the United States dollar. The second token is LUNA, a crypto designed to absorb the volatility and help stablecoins keep their value. Specifically, if increasing demand pushes the value of TerraUSD over $1, the system incentivizes coin holders to trade their LUNA for TerraUSD, which boosts its supply and decreases its value. The system works the same in reverse.
The Terra blockchain is secured by Tendermint, a Proof of Stake consensus mechanism created for speed. To that end, Terra is able to manage 10,000 transactions per second, and it can also achieve finality in about two seconds, making it a lot more scalable than ETH. Collectively, Terra’s price proposition — a quick stablecoin ecosystem — has helped make it a popular platform in the cryptocurrency economy. In fact, Terra is currently ranked as the second-biggest DeFi ecosystem, with over $14.4 billion that is being invested on the blockchain.
Of course, there are many popular dApps that exist on the platform, but Mirror and Anchor are two of the more interesting ones, and both have great potential. The Anchor protocol is created to replace normal savings accounts, and it is much more efficient because it was built on blockchain. In fact, you could earn a 19.3% yearly percentage yield by lending out some TerraUSD right now.
The Mirror protocol lets investors buy and sell the synthetic assets that track (or mirror) the value of real-world assets. That can be anything from ETFs and stocks to other cryptos. For example, mAAPL is one of the most well known synthetic assets on Mirror, and it tracks the value of Apple stock. The advantage of such an asset is that anybody with a smartphone and some TerraUSD could buy it without setting up a brokerage account. The platform has also enabled fractional ownership, a feature that’s not provided by all brokerages.