AVAX vs Solana: Which is the Better Layer 1 Project in 2023?
Technologies like Avalanche (AVAX) and Solana (SOL) are constantly trying to improve the blockchain space. They introduce new and more efficient ways of facilitating, validating, and managing blockchain-related transactions. But which of them is better at performing these core blockchain functions? This article analyzes AVAX vs Solana, pointing out each network’s capacity and characteristics, and determining which blockchain emerges as the best layer 1 blockchain.
- A detailed explanation of what AVAX is.
- A detailed explanation of what Solana is.
- Back-to-back comparison of the key differences between AVAX and Solana.
- Analysis of the future potential of Avax and Solana
AVAX vs Solana: Overview
AVAX and Solana have key characteristics that distinguish them from each other. Let’s summarize the key comparison points between the two ecosystems.
|Tokenomics||720 million maximum supply||511,616,946 maximum supply|
|Consensus Mechanism||Snow Proof of Stake||Proof of Stale and Proof of History|
|Smart Contract Compatibility||EVM compatible||Neon EVM compatible|
|Speed||4,500 TPS||65,000 TPS|
|Average Transaction Cost||$0.13||$0.00025|
|Mainstream Crypto Wallets Supported||Avalanche Wallet
Ledger Nano X
Ledger Nano X
Related Comparison: Polygon vs Solana: Which is the Better Blockchain in 2023?
1. AVAX vs Solana: Tokenomics
Tokenomics is the study of the supply and demand characteristics of a token, including factors such as the total supply, circulating supply, and inflation rate. These factors can have a significant impact on the token’s value and utility.
AVAX has a maximum supply of 720 million tokens, and the inflation rate is set to decrease over time. In contrast, Solana has a total supply of 500 million tokens, with 11.4 million tokens burned, which could make the token more deflationary
Both AVAX and Solana use proof-of-stake consensus mechanisms, and investors can stake their tokens to earn rewards and participate in network governance. However, the staking requirements differ between the two blockchains. AVAX requires 2,000 AVAX to become a validator, while Solana’s staking requirements vary depending on the validator program being used
Another factor to consider is the use case of each token. AVAX is primarily used for transaction fees and governance on the Avalanche network, while Solana’s token, SOL, has a wider range of use cases, including paying for transaction fees, participating in governance, and accessing decentralized applications (dApps) on the Solana network
Based solely on tokenomics, Solana appears to have the edge over Avalanche. Its deflationary tokenomics and lower transaction costs, combined with faster transaction speeds, make it an attractive option for users.
2. AVAX vs Solana: Consensus Mechanisms
Blockchains are decentralized technologies, meaning no central authority validates assets or transactions. Therefore, each blockchain comes up with a transaction validation method to ensure that every undertaking it records is legitimate. We call these methods consensus mechanisms. AVAX’s consensus mechanism is known as the Snow-Proof-of-Stake (POS). It is a hybrid of the proof of stake mechanism developed by the Ethereum blockchain.
In proof of stake, individuals called validators confirm a block’s details and record them. If multiple randomly selected validators approve a block, it is minted and recorded on the blockchain. With Snow POS, AVAX introduced a Directed Acyclic Graph (DAG) to help analyze the block’s details faster. A DAG is a data structure that maps out a block’s details more efficiently, reducing the time taken to verify it.
On the other hand, Solana uses the Proof-of-History (POH) consensus mechanism to validate transactions. POH is a cryptographic mechanism that works like a digital timestamp, proving that a given transaction happened at a particular time.
POH is a more efficient mechanism than Snow POS. Because the former does not need multiple verifications, it takes less time to verify blocks or transactions, making it highly reliable.
3. AVAX vs Solana: Transaction Speed
Blockchains strive to process transactions faster. This helps reduce network congestion and the gas fees related to a given transaction. AVAX is a fast blockchain. The transactions it offers per second are more than those of the top two blockchains, Ethereum and Bitcoin. The network can process up to 4,500 transactions per second.
On the other hand, Solana is faster than AVAX. Because of the blockchain’s consensus mechanism, Solana transaction speed is as high as 65,000 transactions per second. This is about 16 times faster than AVAX.
4. AVAX vs Solana: Smart Contract Compatibility
Besides consensus mechanisms, blockchains have another oversight feature known as smart contracts. These digital contracts serve as guidelines, determining the terms and conditions that apply to a given blockchain operation.
AVAX uses Ethereum Virtual Machine (EVM) compatible smart contracts. This refers to smart contracts built using the Solidity programming language, which is fully compatible with the Ethereum blockchain.
Solana’s smart contracts are not directly compatible with the Ethereum blockchain. The platform’s Neon EVM smart contracts are built using Rust, C, or C++. However, Solana is trying to improve compatibility with Ethereum.
Although Ruby is a simpler programming language than Solidity for beginner blockchain developers, AVAX EVM smart contracts make it very simple to migrate DeFi protocols and Decentralize Application smart contracts across the Ethereum network. This makes AVAX more convenient for building smart contracts.
5. AVAX vs Solana: Staking Rewards
AVAX offers higher staking rewards than Solana. The average annual reward on Avalanche for staking AVAX is about 8.55%. On the other hand, Solana offers an average of 5.5% rewards annually for traders who stake SOL. Therefore, when it comes to staking considerations, AVAX takes the lead.
What Is Solana Is Solana a layer 1 blockchain?
Yes, Solana is one of the best layer-1 blockchains in the cryptocurrency space. The network was first proposed in 2017 by Anatoly Yakovenko. The chain came to life in 2020, offering blockchain users better options than previously existing blockchains.
Solana’s popularity stems mainly from its proof-of-history consensus mechanism that facilitates faster and more efficient transactions. This makes the network more affordable, especially for blockchain developers who want to build their dAPPs, and protocols on the blockchain.
To access Solana, users must pay for services using the platform’s native token, SOL. SOL also serves as a governance token on Solana because the coin’s owners have a right to vote on governance decisions that may affect the network.
What Is Avalanche? Is Avax a layer 1 blockchain?
Avalanche is also a leading decentralized layer-1 blockchain network. Being a layer one means its architecture is self-standing and is built to support other blockchains. Avalanche is the brainchild of Ava Labs, a web3 solutions provider that launched the network in 2020.
The Avalanche network is famous for the range of dApps, NFT marketplaces, and DeFi protocols it supports. To access this, users must pay using the platform’s native cryptocurrency, AVAX. Blockchain developers also use AVAX to build these platforms and keep them running on the blockchain. AVAX is also Avalanche’s governance token.
The Future Potential of Avalanche vs Solana
The future has a lot to offer SOL and AVAX tokens. For AVAX, the Avalanche network is making steady plans to ensure the network can expand horizontally by facilitating subnets. The blockchain has allocated about $290 million to fund this incentive, which will likely payout big time, increasing AVAX’s value.
Besides this, Avalanche continues to grow as more developers prefer redirecting their apps to the network because of its Ethereum-compatible smart contracts. At the same time, as new users mint more AVAX, the blockchain has a constant burn feature that continuously burns AVAX, stabilizing and even propelling the coin’s price.
On the flip side, Solana has wonderful technologies, but the roadmap for growth isn’t as detailed as Avalanche’s. The network is trying to recover the 53.8% value drop that SOL experienced after the FTX exchange, which Solana funded heavily, collapsed.
However, Solana has introduced Neon EVM-compatible smart contracts. This places them in an Ethereum environment, increasing the number of developers who will build on the network and further boosting SOL’s price.
Verdict: Avax vs Solana
Solana is a better layer-1 blockchain than Avalanche. This blockchain has higher speeds, more affordable transaction speeds, and a more efficient consensus mechanism. The only shortcoming with this platform is that it does not have readily available EVM-compatible smart contracts, but Solana is incorporating a Neon EVM feature that resolves this challenge.
At the same time, though, Solana’s superiority does not eliminate Avalanche’s usefulness. Avalanche is still an effective layer-1 blockchain with high transaction speeds, and lower fees than other layer-1 blockchains like Ethereum and Bitcoin.