Ethereum losing Steam To Solana, Cardano, Polygon
Investors who bet a lot of money on ether, the token of the ethereum blockchain, had a rough month in September.
Ether’s monthly decrease fell to its second-largest level since June, after a 16% drop. The pioneer crypto, Bitcoin, lost about 7% during September.
In light of the historic rally in crypto over the past 12 months, a pullback was expected. However, it’s difficult to link short-term price movements to any particular event. In the past year, Ethereum’s value has increased about 830%, which is the second-highest by market value.
The September dip is now being bought by investors. Ether and bitcoin both surged over 9% on Friday, the first day of October.
However, the roller-coaster ride in September reflects a particularly troublesome time for Ethereum and is causing concern for investors and developers.
High transaction fees and slow network speed continue to be a problem. Despite the London upgrade from August, it has had little impact on volatility of transaction fees.
In the meantime, rival blockchains deemed “ethereum killers” are exploiting ethereum’s weaknesses.
Nonetheless, Ethereum, which is the building block for all sorts of crypto projects, including non-fungible tokens (NFTs), smart contracts, and decentralized finance (DeFi), faces some major challenges to fend off the competition.
As a result, companies are looking into platforms like Cardano, which is used to build dApps, and Solana, which has seen a nearly 4,800% growth since September 2020. Due to its cheaper and faster price and faster usage than ethereum, Solana is gaining traction in the NFT and DeFi eco-systems.
A Solana website states the company processes 50,000 transactions per second at a cost of $ 0.00025 per transaction. The transaction speed on Ethereum is limited to about 13 transactions per second, and the fees are substantially higher than on Solana.
There is a flow of institutional funds. Andreessen Horowitz and Polychain Capital led a $ 314 million token sale for Solana.
As investors diversify away from ethereum, alternative blockchains like Tezos, Solana, and Cardano are rallying.
The blockchain isn’t immune to bugs either. Solana was affected by a denial-of-service attack last month, which was caused by bots flooding transactions.
There are several so-called ethereum killers, including Matic and Polygon, both complementary and innovative technologies, and Cardano, which is well known for its security.