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A popular crypto analyst is examining how one upstart blockchain designed for scalability compares to the leading smart contract platform.
In a new video, the anonymous host of InvestAnswers provides his 444,000 YouTube subscribers with a detailed analysis comparing Ethereum (ETH) with rival Solana (SOL).
The host first considers technical metrics as transactions per second (TPS) and number of decentralized applications (DApps) built on each project’s respective blockchain.
“Solana wins TPS. Fees are a tie, even though Solana is still cheaper. Technology, Solana we believe is better, even though it has bugs [and] it’s still in beta.
Ecosystem, Ethereum has the edge. It’s been around much longer and has much more.
Daily active users and breadth of DApps, Solana slight edge. Therefore, Solana is the winner.”
The analyst goes on to look at overall market caps, noting that Solana’s significantly smaller size compared to the valuation of Ethereum plus blockchain scaling solution Polygon (MATIC) suggests that SOL is significantly undervalued relative to ETH.
“This is the million-dollar question. If you look at value hunting… I uncovered things like Tesla [and] Google before they had big runs and that’s the key here. You’ve got to get into stuff early before they have big runs.
If you look at the relative value of this asset compared to others, let’s just look at market caps. If you combine the market cap of Ethereum and MATIC, it is over 17 times larger than that of Solana. Does it do 17 times more? No. That’s my thesis.”
The InvestAnswers host next digs into what comprises each project’s ecosystem, starting with Ethereum which dates back to 2015.
“Ethereum has a vast ecosystem. I estimate it is over three times the size of the Solana ecosystem. It’s like 3,000 DApps versus about a thousand DApps, but since Ethereum was the first successful smart contract platform, it had a huge head start, nearly five years over all other protocols in the smart contract space, the layer-1 space…
Ethereum’s long-term strategy is very favorable since this technology is not only disruptive, but also based on its platform with incredible growth potential and has the largest development community of all cryptos.”
The analyst notes that Solana, which was founded in 2017 and created its first block in 2020, remains in the early stages despite experiencing meteoric growth as a top-10 cryptocurrency. He expects the project will continue to mature and gain further market share from Ethereum.
“Solana, however, is catching up in this aspect. Some [of it] still very nascent stage, has about a billion dollars in TVL [total value locked]. I think it’s $1.4 billion or something right now, and this is small compared to the $35 billion on Ethereum.”
At time of writing, Ethereum is up 7.74% on the day and priced at $1,530. Solana is up nearly 7% and trading for $31.96.