Main navigation

Solana May Not Reach ATH Ever Again If It Doesn't Fix What Ethereum Already Did

Mon, 05/30/2022 - 14:52
article image
Arman Shirinyan
Solana has fewer chances to see its own all-time high once again if it doesn't change a core structure of the project
Solana May Not Reach ATH Ever Again If It Doesn't Fix What Ethereum Already Did
Cover image via
Read U.TODAY on
Google News

The official account of Token Terminal brings up an important matter for Solana network, which could be the main reason for dragging it down as SOL has lost over 80% of its value since reaching the all-time high in November.

The "Ethereum killer" unfortunately, could not copy the best from its predecessor and did not change its fee structure under the rapidly developing market, which could have become one of the main reasons for Solana's poor performance.

Reportedly, Solana makes around $50,000 per day in fees but spends $5 million per day in printing issuance. The imbalance between revenue and spending of the network is the main problem with the sustainability of the network's business model.

Solana's issue with the business model is somehow similar to EOS and NEO, considered by the market as another "Ethereum killer" back in the 2017 bullrun. The issue with both networks was like the problems Solana is experiencing right now, including lack of proper fee structuring and technical issues.

In contrast to "Ethereum killers," Ethereum itself is constantly modernizing its fee structure and changing to comply with the rapidly developing market structure. The upcoming update will bring a new consensus algorithm and possibly change the future of the network once and for all.

Charles Hoskinson to Critics: Cardano Uses "Super Effective Ghost Transactions"

Solana is notorious for its constant downtimes, issues with transaction processing and other problems that push users away from utilizing decentralized apps on the blockchain and releasing their own solutions.

Solana, on paper, is still in its beta version despite moving through a whole bullrun cycle, with thousands of NFT collections and decentralized applications being developed and released on top of it.

article image
About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.