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There have been several alleged Ethereum killers, but none have surpassed the world’s largest altcoin. Is it feasible, then, for Solana to accomplish this feat? Indeed, Solana and Ethereum, according to Kyle Samani, Managing Partner of Multicoin Capital, might be the iOS and Android of the crypto-world.
What’s the Ethereum effect for SOL
Ethereum’s enormous fees and slow transaction speed gave way to alternatives like Solana, resulting in the project’s aggressive growth over the past year. At press time, Solana was ranked tenth in terms of market capitalization following a 69% hike in price.
It had risen from $1.50 at the start of the year to $76.90 at the time of writing. A big amount of this rise occurred in the previous few months, with Ethereum’s difficulties also playing a key influence. So far, SOL is doing well.
It should be stressed, however, that these developments do not pose a threat to Ethereum. Instead, they could pave the path for a more scalable network. So, what now? Will the Solana blockchain be able to compete with Ethereum after “The Merge” occurs?
According to Samani, a recent guest on a podcast, the impact of “The Merge” will be limited to a few percentage of boosts in the market and nothing more substantial. Meanwhile, on the question of whether Solana could displace Ethereum, Samani believes they can actually co-exist.
Expecting Solana to realize its full potential within the next 24 to 36 months Samani noted,
“What is interesting, (in what is) happening right now, is that they both coexist. They both have different growth rates. I think Solana’s growth rate will be sustainably higher than Ethereum’s foreseeable future -meaning the next 24 to 36 months.”
Stating that “inertia lasts for several years,” Samani explained that Ethereum is not going anywhere due to the infrastructure it has built. He added,
“I think we’re going to see two things coexist. We have iOS, we have Android. And, today, everyone knows you have to build an iPhone app and an Android app.”
Nature of competition will be…
While there are still several competing ecosystems, the competition will heat up when Ethereum fully turns into Ethereum 2.0. The offer, however, will be for a more decentralised platform.
Although Ethereum is undeniably more decentralised than Solana, Samani maintained that labelling it as centralised would be inaccurate. “Decentralization is a spectrum,” he remarked, rather than a binary. The question here could be, “Who is in charge of consensus?”
Solana requires 19 nodes for staking to reach 33%, but Ethereum requires only three of four mining pools to reach 51%. In contrast, ETH 2.0 requires seven or eight organisations to reach one-third consensus, which is the control metric for PoS systems.
Ethereum, according to the executive, is just 3x or 4x more decentralised than Solana. On the decentralisation spectrum, this is a smaller gap.