Solana has been a trending topic due to the successive weeks of cost increases seen by its SOL token. At the fourth dimension of writing, SOL traded at around $207, which is an 11,400% surge from less than $two back in Jan. At its nowadays worth, Solana sits among the top x cryptocurrencies by market capitalization with about $sixty billion, claiming the sixth spot from Dogecoin (DOGE), co-ordinate to Cointelegraph Markets.

One of the probable catalysts of this bullish momentum is funding from investors led by Andreessen Horowitz and Polychain in June. Solana secured $314 million, which will exist used to farther its technology in the decentralized finance (DeFi) arena. Notably, the investment took the form of SOL coin purchases rather than traditional equity shares.

Some other key reason for Solana's SOL price boom is the annunciation of its fourth hackathon event slated for Oct. 8. Hackathons are targeted at developers whose projects are entered into a competition for a chance to win cash prizes and seed funding opportunities. This was perceived as a positive move for Solana, as it could help achieve wider adoption of its technology.

Then, with Solana making headway, pundits can't help merely compare it with a similar programmable blockchain: Ethereum. Many have gone every bit far as to say that Solana could exist an Ethereum killer, competing with Polkadot, Avalanche and Binance Smart Chain.

What is Solana?

Solana is a layer-1 blockchain network that can implement smart contracts. Founded in 2022 by Anatoly Yakovenko, a one-time Qualcomm senior staff engineer manager, Solana is billed as the solution to the scaling issues of Bitcoin and Ethereum. Two years after its founding, Solana was able to country $20 million in a Series A funding circular led by Multicoin Capital.

While Bitcoin (BTC) is widely accepted as a peer-to-peer form of money, Ethereum, on the other hand, is the platform for turning almost everything peer-to-peer. Solana is in the same league as Ethereum, with its smart contract capabilities and layer-1 infrastructure, but it brings along several other propositions.

Ethereum is still the height option for building decentralized applications (DApps) and deploying smart contracts, but information technology can't be denied that it'southward plagued with legacy issues that it's trying to refine over time. Due to a lack of scalability, users occasionally face up notoriously high gas fees. Although its transition to proof-of-pale (PoS) is already in motility — and is estimated to reduce such fees through an increased transaction throughput by applying shard chains — it isn't expected to be fully merged to Ethereum'due south mainnet until belatedly 2022 or 2022. This is because the Beacon Chain that will coordinate all the shards is notwithstanding under testing despite going alive in December 2022.

On the other hand, Solana already has a PoS structure baked in as its consensus mechanism. However, the primal innovation is in its proof-of-history (PoH) protocol. Under a PoS organization, it may be hard for validators to discover chronological gild in incoming blocks of transactions. PoH'southward fashion effectually this is by establishing a historical tape that cryptographically verifies the passage of time between two events.

Essentially, each Solana validator maintains its own "clock" that verifies the order of the result and hashes the passage of time. Therefore, information technology creates a sequence of hashes that are all achieved through a verifiable delay function. Yakovenko described it in 2022 as "a way to encode time as data."

In other words, Solana can procedure transactions equally they come up equally opposed to waiting for a block to be filled, which tin be a lengthy process. This enables Solana to exist more scalable, processing more than transactions than some other blockchains.

Aside from this, Solana also brings in a block propagation protocol called Turbine, which breaks upwards important data into $.25 that can then be sent to nodes at a faster rate without taking up so much bandwidth. Solana also implements Tower BFT, an advanced version of the practical Byzantine fault-tolerant system in other delegated proof-of-stake blockchains. Belfry BFT also compliments PoS, as information technology acts equally the gatekeeper of the network.

An Ethereum killer?

Despite Ethereum being the superior network — with 7,000 nodes and xc,000 validators, compared with Solana's 600 nodes and 1,000 validators — Solana is nonetheless dubbed an "Ethereum killer." A large part of this is due to how its innovations address the perceived weaknesses in Ethereum.

Through the aforementioned PoH consensus in which validators maintain their ain clock, transaction verification is cutting brusk, as nodes no longer take to put in processing power to verify various timestamps. This improves the speed at which transactions are processed. Solana claims that it tin process upwards to 60,000 transactions per second, which is a far cry from what Ethereum and even Bitcoin, Visa and XRP combined tin can offer.

Non only that, only transaction costs are significantly lower. As mentioned earlier, one of the biggest drawbacks for Ethereum users is that gas fees tin can be volatile and absurdly high. Users sometimes pay up to $65 to process a transaction. Terminal year, 1 user fifty-fifty paid $9,500 but to trade $120 on Uniswap. With Solana, fees tin can fluctuate near a mere $0.00025 per transaction — worlds apart from what Ethereum charges.

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Joining the NFT trend

This year, nonfungible tokens (NFTs) have been all the rage as artists, investors, collectors, traders and celebrities accept begun to dabble in this blockchain-based movement. The bulk of NFTs are however transacted over at the Ethereum network. However, Solana is slowly trying to catch a share of this nascent market.

A new NFT project called Degenerate Ape Academy became a test of its scalability as the entire collection of x,000 apes sold out in but eight minutes. This acquired the toll of SOL to soar to $53.70 on Aug. xv, from trading at $44.xi just a day before.

The Solana NFT market place Solanart, which tracks the sales of the  NFT collections, shows that the Degenerate Ape Academy NFTs are the dominant force in Solana NFT sales. The collection has already amassed a book of 765,000 SOL tokens, which would interpret to about $122 one thousand thousand at its current toll.

In view of this, those who once enjoyed transacting on the Ethereum network could exist tempted to modify sides altogether. Nathan Ross, former principal marketing officer of dating app Hinge, tweeted virtually how Solana is a better fit for NFTs because it is faster, cheaper and easier than Ethereum.

Then, there's as well the integration with FTX, with the popular crypto derivatives platform launching its own NFT market place on Sept. 6.

Tin can Ethereum compete with Solana in the long run?

The question now is: Tin Solana outdo the blockchain platforms of the top two altcoins? Ethereum 2.0 isn't expected until sometime next year, every bit Phase 2 of the upgrade'due south timeline is until belatedly 2022 or early on 2022. With the upgrade, proponents believe that transactions on Ethereum could exist much cheaper and could even reach 100,000 per second, or more.

In spite of that, Solana's design architecture allows it to proceed footstep, as it is theoretically made to scale with Moore'due south law. This ways that every bit computers become faster over time, so will Solana. Essentially, Solana is future-proofing itself through its scaling capabilities. If this proves to be the instance, will Solana exist the culprit for taking an ax to Ethereum?

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