The new technological update of the Ethereum network triggered the price of ether, the currency of this blockchain and cHe put other competing cryptocurrencies, such as Solana, in the spotlight. His prospects received a strong boost.
Known as’London Hard Fork ‘, This profound technological change has meant eliminating the base fee paid by users to process transactions. What’s more, the people who create the coins, the miners, saw their remuneration reduced for this job.
A part of that base fee directly disappears (burns, in slang) so miners see their income reduced and may have incentives to work on creating other, more profitable digital currencies.
In the event of this migration, lThe experts identified Solana as one of the most favored digital currenciess.
Solana, among the currencies that can present battle to the ether
“It would be a key beneficiary of a possible migration, as it can process transactions at a much faster rate, even after the Ethereum upgrade,” he said. Nirmal Ranga, from the firm Zebpay, to the newspaper Economic Times.
Of course, it is not the only coin that could stand up to ether. As INVERSIÓN explained in its report on the cryptocurrency war, there are other very powerful currencies in this ecosystem, such as Polkadot and Algorand.
Solana is a very recent digital currency. It was created in 2020 with the great appeal of driving scalability. That is, the network allows you to execute a large number of transactions at prices much cheaper than in Ethereum.
This is its strong point, huge speed and very cheap rates. The network can process around 60,000 transactions per second at marginal cost, making Solana a highly efficient digital currency for daily payments.
Recently, one of the most popular stablecoins on the market, the tether, was integrated into the Solana blockchain. There are several cryptographic projects that are leaving the Ethereum network in their search for cheaper and more efficient alternatives.
The importance of decentralized finance
The truth is Solana has become one of the digital currencies that are challenging the Ethereum throne the most. At stake is the battle to be the blockchain of choice in decentralized finance (DeFi).
Now is when they have occurred the first serious skirmishes. Therefore, the technological update of Ethereum will help reduce the gap in speed and cost compared to Solana. Also, the Ethereum 2.0 update is coming, which will further improve scalability.
Equally, what Solana lacks is a strong spike in price that makes the currency move in the orbit of investors, and not just developers.
It is currently the eleventh coin on the market, with a capitalization of $ 12,537 million, compared to Ethereum’s $ 379,163 million.
The funds begin to be fixed in Solana
Nevertheless, some mutual funds are starting to fixate on this emerging currency. It is the case of Apollo Capital, an Australian fund that returned 119 percent in the past year.
In addition to your investments in the bitcoin and ether, the managers of this fund disclosed positions in other currencies such as Solana, Polkadot or Polygon.
In addition, ether has greater institutional adoption. If you go further, the European Investment Banks issued a bond in ethers for 100 million euros at the beginning of summer. And in Spain, the CNMV has begun to clear the way for funds to invest in bitcoin and other digital currencies, such as ether.
With everything, Solana’s adoption is still far behind Ethereum’s. After all, it was the first blockchain to propose an environment for DeFi applications, and its brand is much more established.
Nevertheless, It remains to be seen how the Ethereum 2.0 technology update turns out. If there were problems, it could increase market confidence. The battle against Solana and other emerging cryptocurrencies has only just begun.