Solana and Cardano are among the top proof-of-stake (PoS) crypto networks in the crypto space.
These are the networks that drive web3, consisting of all things smart contracts, decentralized applications (dApps), DeFi, and the likes. They have many similarities since they use the same or at least similar consensus mechanisms.
However no two networks are exactly the same, so we want to compare the two and show you the differences to help you decide on which one you should use. Whether you’re looking for an asset to invest in or a network to use for building things, this guide is for you.
Without any further waste of time, let’s dive into the details.
What Is Solana (SOL)?
Solana is a scalable PoS crypto network that is commonly referred to as the Ethereum Killer. It got the name because of its scalability and speed, which makes the cost of transactions low. This is the opposite of Ethereum which has low scalability, slow transactions and high transaction cost.
The strength of Solana lies in its unique consensus mechanism. Though it uses the regular PoS consensus, it has in addition what is called proof-of-history (PoH). This additional consensus is what makes the network infinitely scalable.
The network is powered by SOL, the native token designed for it. SOL is the token used to pay for transaction fees for all activities on the Solana network. It is also the staking token used to secure the network.
As a PoS network, Solana depends on validators who stake their SOL to secure the network and help verify transactions. SOL also empowers holders to vote on important updates on the network, thus also serving as a governance token.
The token currently has a total supply of roughly 600 million tokens, but it doesn’t have a capped supply. This means that it is an inflationary token, that is the supply will continue to increase until it reaches a stable 1.5% annual inflation rate.
In spite of its inflationary nature, SOL has been one of the best performing cryptocurrencies recently. It was the best performing asset among the top ten cryptocurrencies last year.
What Is Cardano (ADA)?
Cardano is the 10th largest cryptocurrency by market capitalization. As a PoS network, it supports all kinds of web3 features. The network has a unique approach to implementing developmental changes, which requires thorough scientific research.
Proposed changes to the network must be peer-reviewed for the founder, Charles Hoskinson to approve for implementation. As a result, Cardano seems slow in its growth but Hoskinson believes his approach is guaranteed to make Cardano the best network in the future.
Cardano uses a PoS consensus mechanism known as Ouroboros. This makes it more efficient than the proof-of-work (PoW) networks like Bitcoin which require intensive energy use to sustain the network through mining.
The PoS consensus also makes Cardano much more scalable and fast in processing speed, making transaction fees low.
ADA, the native token is used to pay for transaction fees and for staking to secure the network. It is also used to pay stakers rewards that incentivize them to continue securing the network. ADA also serves as the governance token for the network, empowering holders to vote on proposed changes to the network.
ADA has a circulating supply of 35 billion tokens and a total supply of 37 billion tokens. However, the maximum supply can be as high as 45 billion tokens. Like SOL, ADA is pre-mined, and so does not need mining.
Which Is Better?
Both Solana and Cardano are top PoS networks. However, SOL seems to be ahead of Cardano even though Cardano is older. Therefore if you’re looking for an excellent network to build, Solana is the place.
SOL is also a much better token in terms of investor returns. It has grown rapidly since its launch and still holds much promise with high investor optimism compared to ADA.
