Cardano vs. Solana: Which is Better?

Cardano vs. Solana: Which is Better?

Both of these Ethereum Killers have made a killing for your wallet, but which is poised to do better in 2022?

Cardano vs. Solana: Which is Better?
Megan DeMatteo

Published Dec 22, 2021Updated Jun 10, 2022

Crypto

Crypto

Technology

Technology

Active Investing

Active Investing

In This Article

Past Year

Cardano (ADA) and Solana (SOL) are considered the cryptocurrencies that will “kill” Ethereum. Both projects aim to improve upon the original premise of Ethereum: to create practical use-cases for blockchain beyond just “internet money.”

Solana and Cardano are similar in that they're focused on making an environmentally conscious, scalable, and efficient blockchain. Cardano made headlines a few years back for its founder Charles Hoskinson leaving the Ethereum project to build Cardano, a proof-of-stake blockchain that would combat Ethereum’s huge environmental impact. Solana was created by computer science veteran Anatoly Yakovenko as a means to solve Ethereum’s slow network transaction times and high transaction costs (known as “gas fees”), namely by relying on a proof-of-history consensus mechanism. 

Utility tokens like Cardano and Solana are more like stocks in the sense that they represent the value of their respective blockchain projects.

Both of these projects have had massive returns this past year, and for good reason. Since so many people are using the Ethereum blockchain to mint and buy NFTs, the crypto community is expressing concerns about the blockchain’s environmental impact. Cardano and Solana aim to solve these problems and create more efficient blockchains for the future—which also could help make you some extraordinary returns.

However, Cardano and Solana are far from being interchangeable. Let’s dive into how the two blockchains compare.

Cardano vs Solana compared

In the CoinDesk 20 list published by leading crypto news outlet CoinDesk, both Cardano and Solana rank in the top 10 most valuable coins by market cap. While the price of SOL has long been higher than the price of ADA, they sit next to each other in terms of market cap. One of the biggest differences between the two coins is their underlying technology, with Cardano being built on a proof-of-stake mechanism and Solana on a proof-of-history mechanism. And while Solana is arguably more established, Cardano has a lot of room to grow.

Here’s how the two compare at a glance.

Stats

Cardano (ADA)

Solana (SOL)

Price

YTD Returns

Market Cap

Circulating Supply

33 billion ADA 

339 million SOL

Founders

Charles Hoskinson

Billy Markus and Anatoly Yakovenko

Use Cases

Smart Contracts, Store of Value, Exchange of Value

Defi, NFTs, Store of Value, Smart Contracts, Exchange of Value

Defi Compatibility

Yes

Yes

Eco-Conscious?

Yes, through its proof-of-stake validating mechanism

Yes, through its proof-of-history validating mechanism 

Influential Supporters

Lex Fridman, Justin Roiland and Gene Simmons

Andreessen Horowitz, Chamath Palihapitiya, Michael Jordan, Melania Trump

Tech Built On

Proof-of-stake

Proof-of-history

Maximum Supply

45 billion ADA

No maximum supply, but fixed issuance (1.5% inflation annually)

Smart Contract Capability

Yes

Yes

Mainstream Adoption

Minimal 

Minimal widestream uses, but popular for NFTs

What is Cardano?

Cardano was created by a co-founder of Ethereum to be a more environmentally conscious blockchain with the capability for smart contracts, DeFi, and decentralized apps. In September of 2021, it unveiled an update to allow for NFTs to be built on its platform

Cardano’s consensus mechanism is the proof-of-stake, meaning that blocks are added to the Cardano blockchain in a more environmentally sustainable way than the proof-of-work model Bitcoin is minted on.

Cardano’s cryptocurrency is known as ADA. It's named after Ada Lovelace, a beloved historical figure and daughter of poet Lord Byron who's recognized as the first computer programmer.

Cardano Use Case

Cardano's use case was initially as an energy-efficient cryptocurrency. Like all cryptocurrencies, Cardano’s ADA can be used to send and receive funds as well as store value. However, its utility has since expanded beyond that. The Cardano blockchain has the capability for smart contracts, which has led to increased attention surrounding NFTs and decentralized finance (DeFi)—especially as Ethereum’s costly gas fees (transaction fees) climb higher and higher. 

Cardano price prediction and market cap

Cardano's price is currently
. It hit an all-time high in late 2021 of nearly $3.00 but fell during the May 2022 crypto crash to lows not seen in well over a year. Cardano currently sits at a
market cap, making it one of the biggest proof-of-stake blockchain projects on the block.

While bullish analysts predicted ADA could hit $10 by the end of 2021, it never managed to surpass the $3.00 mark, though it did achieve several surges in price. It also didn't crash quite as hard as other popular coins, SOL included, during the dip in January 2022. As of the May 2022 crypto crash, few analysts predict ADA will suprass $1.00 by the end of 2022, and many don't believe it will return to its high of nearly $3.00 until 2025.

Cardano Mainstream Adoption

Cardano’s blockchain is powerful, but it lacks major present practical use cases. It was not NFT-capable until September of 2021, which means that it missed out on being a first mover blockchain for NFTs, which were literally the word of the year. 

As a form of digital currency, Cardano has been said to aim for becoming the Visa of crypto. The most important factor here is throughput—or how many transactions can be completed per second (TPS). Cardano's average of 250 TPS is impressive when compared to Ethereum's 12 to 15 TPS capabilities, but nothing compared to Visa's reported 65,000 TPS capacity. In fact, it's significantly lower than Solana's average of 3,000 TPS. That said, Cardano's anticipated upgrade Hydra promises up to 1 million TPS as well as lower transaction costs.

The Cardano blockchain has many different capabilities, but most of these applications are still unused in the present market. In 2021, Cardano unveiled its smart contract capabilities. However, we’re still waiting for major mainstream applications for the Cardano blockchain.

Pros and cons of investing in Cardano

Pros

Pros

Environmentally sustainable Ethereum alternative

Pros

Reputable founding team

Pros

Scalable technology

Cons

Cons

Long-term project so growth is slow

Cons

Ethereum merge could hurt Cardano

Cardano is touted as an environmentally sustainable alternative to Ethereum and one of the major projects in Web3. It has a reputable founding team, peer-reviewed technology designed for scalability, strong ties to the crypto community, and a partnership with Ethiopia. The Cardano team is thorough but slow. While the project has ambitious goals that, if achieved, could easily cause ADA to skyrocket, its long-term focus gives competitors (Solana included) the opportunity to move in and steal the show before Cardano gets the chance to live up to its potential.

Cardano is an “Ethereum Killer” but many don’t want Ethereum killed. Ethereum has plans to undergo a major update in 2022, where it aims to become a proof-of-stake blockchain. This will hurt Cardano’s biggest selling point as an environmentally conscious blockchain.

What is Solana?

Solana is a blockchain project created by long term computer programmer Anatoly Yakovenko. Yakovenko realized that one of the biggest problems that faced the two biggest crypto projects, Bitcoin and Ethereum, was their lengthy transaction times.

This is where he came up with the idea for proof-of-history. This mechanism provided a totally different way of validating transactions, making the Solana blockchain somewhat revolutionary for cryptocurrency. Remember: At the end of the day, the crypto has to be useful and scalable. 

Solana is incredibly fast at processing transactions. Solana takes 400 milliseconds for a transaction. It averages 3,000 transactions per second (TPS) and can handle up to 50,000 TPS. To put this into perspective, Ethereum takes 10 to 15 seconds to process one transaction and can only handle 15 to 45 TPS at max. Pretty bananas.

Solana was initially released in April 2019 at a trading price of $1 and skyrocketed past the $250 mark by late 2021. It's also backed by some well-known tech titans like Andreessen Horowitz.

Solana Use Case

Solana has many different kinds of potential use cases. Like all cryptocurrencies, it's an exchange and store of value. It also has the capability for DeFi and NFTs—two crowd pleasers, for sure.

Meanwhile, Ethereum’s finicky gas fees could skyrocket into the hundreds or even thousands of dollars at any moment—especially at times of high network congestion. Imagine being an artist who wants to make an NFT and then realizing that the fees to list your NFT on OpenSea are higher than the cost of the art itself—talk about prohibitive. 

It’s this very pain point that’s drawn so many people to Solana. Solana’s fees are comparatively nothing, as it typically costs somewhere around 0.000005 SOL, or a small fraction of one US cent.

Solana price prediction and market cap

The market cap of Solana is currently at
, with a price of
per token. It hit an all-time high of nearly $260 per token and a market cap of $78 billion in November 2021 but spent the following six months on the decline. Despite this, it's still well above the $2 price point it sat at going into 2021. Given its history of aggressive upward price movement, bullish analysts predict that SOL will rebound and surpass its $260 all-time high by 2023.

The circulating supply as of May 2022 is 339,137,144 SOL, and Solana has no cap on how many tokens can be made. That said, it will eventually have a fixed issuance of a 1.5% increase. So, unlike Bitcoin, Solana is inflationary.

Solana Mainstream Adoption

Solana's recent successes in terms of general public adoption have largely been in the arena of NFTs, which exploded into a multi-billion dollar investment tool in 2021. Solana is the second-biggest cryptocurrency player in the NFT space. Solanart is a platform by which you can trade Solana backed NFTs. Some of the big names in Solana NFT world include Melania Trump, Michael Jordan, and Soulja Boy.

However, Solana has had problems with network outages that have lasted up to 17 hours, which could destroy its chances at mainstream adoption. In early 2022, Solana confirmed the network had been experiencing a high number of transaction failures for several days. While Solana as both a blockchain project and a cryptocurrency moves faster than most, its efficiency sometimes comes at the cost of accuracy.

Pros and cons of investing in Solana

Pros

Pros

Extremely fast transaction processing

Pros

Low-cost Ethereum alternative

Pros

Scalable technology

Pros

First-mover advantage in the NFT space

Cons

Cons

Inflationary currency

Cons

Problems with network outages

Cons

Less decentralized

Cons

Hype may be unsustainable

In terms of its technology, Solana seems to be leaps and bounds ahead of other blockchain projects. It is low-cost, fast, and scalable—plus it has a community of new crypto enthusiasts who are cutting their crypto teeth on its blockchain.

There is a huge fanbase of Solana due to its early embrace of NFTs, and in the cryptocurrency world community is nearly everything. Due to the advanced technology and lower tax fees than Ethereum, well-known celebrities are choosing to work with Solana rather than Ethereum to mint their projects. On top of that, powerful backers like Andreeson Horowitz make Solana is a strong investment for anyone looking to enter crypto.

Solana has arguably better technology than Ethereum and provides its users with low cost, quick transactions, although this efficiency sometimes results in network outages that could stifle its journey toward mainstream adoption. Investors in SOL also need to be wary of the fact that it is inflationary. Finally, with just over 1,000 validator nodes, Solana is significantly less decentralized than many other cryptocurrencies, Caradano included.

Solana’s biggest criticism is actually of the so-called Solana whales who own a lot of SOL. In November, Chamath Palihapitiya and David Sacks joked about selling all of their Solana on Episode 50 of the All-In Podcast—which wasn’t exactly cute, according to crypto believers. There is a general anxiety that Solana skews in top heavy ownership by whales, making the ecosystem ripe for a “bump and dump” scheme (aka market manipulation).   

This is the duality of Solana. Much of its hype comes from having notable backers like Andreessen Horowitz, but that has isolated it from the veteran crypto people who don’t like big name Venture Capital firms stepping into a system that was created to rebel against the elites. If you’re a crypto purist and libertarian pirate at heart, maybe look to other tokens that have lower public sentiment. That way, you can potentially ride the waves from the bottom all the way up, as opposed to getting in while popular opinion is already favorable. After all, the higher the price, the harder the crash.

Will Cardano or Solana be Accepted as a Payment?

Both Cardano and Solana are likely never going to be primarily used as exchanges of value. Both cryptocurrencies are utility tokens, not coins. Coins like Dogecoin and Bitcoin exist as a means to exchange value for a good or service. Utility tokens like Cardano and Solana are more like stocks in the sense that they represent the value of their respective blockchain projects.

Price Considerations: Cardano vs Solana

Both blockchain companies will likely appreciate as long as the sentiment towards crypto and blockchain stays positive. However, they lack the community that Bitcoin and Ethereum have built from being first movers in this space. Sadly, Solana and Cardano risk depreciating quickly in bear markets—as evidenced by the crypto crashes in 2022—so you’ll want to keep a long-term strategy in mind.

And while we’re at it, let’s address the elephant in the room: A big concern for both Cardano and Solana is Ethereum’s forthcoming merge, due to happen in 2022. If Ethereum becomes more akin to Cardano (aka adopting a proof-of-stake)—and it becomes faster like Solana—both "Ethereum killers" could lose their novelty.

The bottom line: Cardano or Solana?

Cardano is a project that is still iterating. The prevailing sentiment is that Cardano is an evolving project, whose governing body often misses deadlines, but does so because it tries to be perfect. Solana is considered to be a better technological product with impressive backers, but the issue is those backers potentially own too much and can dictate the market.

It’s kind of impossible to predict what the price for both Cardano and Solana will be down the line. Online projections forecast Solana to be worth between $500 and $1,000 dollars in 2025. However, this is also speculation. Much of the current Solana supply is tied up in DeFi staking mechanisms. Something like 77% of the eligible Solana is staked, which means that when that staking period ends, investors could technically sell their Solana and cause a price drop. 

That said, it’s in every Solana owner's best interest to make sure that the price doesn’t drop too heavily. But if those Solana whales pull out, all bets are off, and someone will be left to pay the price. 

Meanwhile, Cardano is aiming to iterate like crazy with ambitious scaling goals, and people view its price projections with a somewhat optimistic lens. However, things changed when Solana arrived on the block, so investors need not get too excited. Niche online publications project ADA to be worth around $3 to $4 dollars per token in 2025.

Where to Buy Cardano or Solana

Both currencies are available on major crypto exchanges like Coinbase, Binance, Kraken, and Gemini. While Coinbase is user-friendly and ideal for beginners, Kraken has lower trading fees, making it great for more active crypto investors.

kraken
Kraken

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Which crypto uses a proof-of-history validation mechanism?

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