Certainly, Solana (SOL) is one of the cryptocurrencies most affected by the FTX meltdown. The competitor of Ethereum (ETH) experienced a large loss of market capitalization shortly after the announcement of the insolvency of Sam Bankman-Fried’s (SBF) companies.
Why did that happen?
SBF has always shown himself to be a big supporter of the altcoin. Therefore, his ventures had strong investments not only in Solana but also in tokens from the cryptocurrency ecosystem. Just to give an example, SBF acquired $1.2 billion in SOL tokens through Alameda.
In addition, the trading company reportedly owned $1.15 billion in Solana and it was accused of selling its altcoin holdings to prevent the crash of FTT, FTX's token.
These factors contributed to SOL undergoing a strong correction and dropping out of the top 10. In this sense, the question arises: is it 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 smart contracts arena, Cardano and Solana have some differences.
Solana was designed to facilitate the creation of 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, on the other hand, 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 for offering staking that does not lock users' ADA.
While SOL's network development language is Rust, ADA's is Plutus, inspired by Haskell.
What is the best “Ethereum Killer?”
The debate over the potential for Solana and Cardano to overtake Ethereum is not new. However, that reality is a long way off for both altcoins.
Ethereum is still the leader in smart contracts, with NFT volume and total blocked value (TVL) in DeFi much higher than its competitors. In this sense, it is possible to say that, before competing directly with ETH, competitors of the main altcoin on the market are competing with each other.
As for Solana's TVL, it experienced a 54% drop between Nov. 8 and Nov. 21, according to data from DeFi Llama. Cardano's, on the other hand, had a drop of 22% in the same period.
Even considering that TVL is calculated on top of volatile assets and that, since the mentioned date, the cryptocurrency market has undergone a strong correction, Cardano still outperformed Solana.
Apart from the bankruptcy of FTX, Cardano still has the advantage of having a network that does not go offline. Although the ADA team is accused of delaying its deliveries, the cryptocurrency has managed to prove itself resilient among Ethereum's competitors, even if its prices are not the most attractive since its high history seen in 2021.
The collapse of a major Solana backer was just what the market needed for the cryptocurrency, which has had eight network outages since its launch, to be sidelined, at least until this chaos is over.
However, although Cardano is a few steps ahead of its rival, demand has not yet made its network reach its usage limit. As such, the altcoin needs to stand the test of time to prove that it can rival Ethereum.