Cardano vs Solana Overview
Solana and Cardano are both open-source, decentralized cryptocurrency platforms that use blockchain technology. Both are designed to be scalable, fast, and secure, and both have their own native cryptocurrencies: Solana's is called SOL, and Cardano's is called ADA. Here are some key differences between the two platforms:
- Purpose: Solana is primarily focused on providing a fast and scalable platform for decentralized applications (dApps) and decentralized finance (DeFi), while Cardano is a general-purpose platform that aims to provide a more secure and scalable foundation for a variety of applications, including financial applications, identity verification, and smart contracts.
- Consensus algorithm: Solana uses a proof-of-stake (PoS) consensus algorithm called "Proof of History" (PoH), which allows the network to achieve high transaction speeds by using a decentralized clock to timestamp transactions. Cardano uses a hybrid proof-of-stake (PoS) and proof-of-work (PoW) consensus algorithm called "Ouroboros," which aims to provide security and decentralization while also allowing for high transaction speeds.
- Development team: Solana was founded by Anatoly Yakovenko and is developed by a team at Solana Labs. Cardano was founded by Charles Hoskinson and is developed by the IOHK research and development team.
- Adoption: Both Solana and Cardano have seen growing adoption in the cryptocurrency and blockchain space, with Solana being used by a number of decentralized finance (DeFi) projects and Cardano being used for a variety of applications, including supply chain management and voting systems.
What are the Key Differences?
Solana and Cardano are both built on innovative PoS consensus mechanisms that allow for high transaction throughput without sacrificing decentralization. Cardano uses a mechanism called Ouroboros, while Solana relies on its own native consensus algorithm, called Proof of History (PoH).
Both networks can offer much higher transaction throughput due to their PoS mechanisms. Cardano can process 250 TPS, while Solana is theoretically able to process up to 50,000 TPS. However, it should be noted that both networks are still in development and have not yet been fully tested at scale.
Decentralized Finance (DeFi) Ecosystems
Solana has one of the largest and most active on-chain Decentralized Finance ecosystems and is the 6th highest by Total Value Locked (TVL). The network currently has over $1.2 billion in TVL on popular SOL-native applications like Marinade Finance (MNDE), Solend (SLND), Raydium (RAY) and Orca (ORCA).
Cardano on the other hand has a less mature DeFi ecosystem, with only $83.8 million in TVL locked on applications using their network. Cardano has fewer on-chain users than Solana by several orders of magnitude, with only 10 active DeFi dapps on their network. Some popular ADA DeFi applications include Minswap (MIN), WingRiders (WRT) and SundaeSwap (SUNDAE).
Solana has the second largest NFT ecosystem behind Ethereum mainnet, with thousands of daily active users and over $50 million in volume traded on a daily basis. Solana has an abundance of popular NFT Marketplaces, with Magic Eden being the largest on the network. OpenSea also supports SOL and SOL native wallets like Phantom, which highlights how popular the network is for NFTs, GameFi and other Metaverse digital collectibles.
Cardano on the other hand still has a very nascent NFT ecosystem, with very few Cardano NFT Marketplaces live on the network. ADA NFTs currently trade about $250,000 in daily volume, which is 1:100 the value of Solana in comparison. Some of the most popular NFT Marketplaces on Cardano include CNFT, JPG.Store and Cardano Cube.
Both Cardano and Solana have large and active development communities, with both projects having over 100 monthly code commits on average. However, Cardano has a much larger development team, with IOHK alone employing over 200 full-time engineers and developers. This is likely due to the size and scope of the Cardano project, as it aims to be a general purpose smart contract platform like Ethereum.
In comparison, Solana Labs only employs around 30 full-time developers, which is still a very impressive number given the size of their project. The Solana community is also very active on GitHub, with over 2,000 code commits in the past month.
Cardano is often lauded for its scientific approach to blockchain development. The IOHK team consists of academics and researchers who have peer-reviewed the project’s whitepapers and code. This rigorous approach has resulted in a well-designed network that is constantly being improved upon.
Solana, on the other hand, was created by experienced software engineers from companies like Qualcomm, Intel, and Dropbox. The team has a strong track record in building large-scale distributed systems. While Solana may not have the same level of academic backing as Cardano, its developers are well-qualified to build a high-performing blockchain.
Solana is the better overall layer-1 network on most, if not all quantifiable metrics. Their on-chain community is more engaged, they have more developers working on applications built in the native programming language, and their NFT ecosystem is much more active.
Cardano does have a more comprehensive roadmap and a stronger development team, but these advantages may not be enough to catch up to Solana in the long run.