An Analysis Of Solana Vs Other Layer 1 Blockchains

On this page we will discuss the comparison of the number of unique wallets that have sent a transaction on Solana, Ethereum, and Terra since February 1st. Let’s also take a look at how Solana’s user adoption compares with that of other chains. Is there any evidence that market conditions are slowing the networks’ growth or activity?

If you are talking about scaling solutions, blockchain layers refer to the level at which the solutions are implemented; whether they are directly applied to the blockchain or whether they work atop of it as an independent protocol. Generally speaking, layer 1 of blockchain refers to the distributed database itself, the peer-to-peer system that joins all the nodes and the underlying consensus mechanism. For example, the Bitcoin network is layer 1, Ethereum is the Ethereum network.

We can consider these are the solutions for blockchain layer 1:

  • Faster block creation.
  • Larger blocks.
  • Several transactions can be processed simultaneously by sharding, which breaks blocks of transactions into small units, and processes them simultaneously on the blockchain.

Here in this post we are focusing on layer 1 blockchains of Ethereum and Terra here and comparing them with the Solana blockchain.

Unique Wallets Based On Blockchains 

As you can see from the chart below, all active users by blockchain on a daily basis since Feb 1, 2022 can be compared. Based on the comparison of the four blockchains here, we can see that Ethereum has the highest percentage of active users since February 1, 2022. There is also a growing trend of active users across all blockchains.

According to the following graph, there are almost twice as many active Ethereum users as there are active Solana users since February 1,2022. We didn’t see much terra active users in the same time period.

From the below graph we can see the comparison of active users on both Solana and Ethereum seperately. The number of Ethereum active users were more than Solana since Feb 1,2022. If we compare the spikes in the graph below on Feb 5 2022, we can see an increase in active users on Ethereum from the previous day. Similarly,on the same day if we compare the previous day’s spikes on Solana, we can see a decrease in active users.  A similar pattern can be seen if we take another spike from the graph below on Mar 10 2022, where the number of active Ethereum users has increased. Comparing the same day’s spikes on Solana with the previous day’s spikes, we see a decrease in active users.  Thus, it seems that Etherem and Solana have no much correlation, and all these were also caused by market volatility in the crypto world.

In the same way, the graph below compares active users for Solana and Terra. Since Feb 1,2022, Solana had a higher number of active users than Terra.

Transactions Based On Blockchains 

Below is a chart showing the comparison of all blockchain transactions since Feb 1, 2022. Comparing Solana with all other blockchains, we see by Solana there were a greater number of transactions. More than 90% of transactions were done by Solana . There we can see a decreasing trend of transactions .

There have been more transactions in the Solana since February 1,2022. This proves that the Solana has reached its goal. In other words, the main objective behind the Solan blockchain is that it can maintain a high TPS compared with other blockchains. Therefore, the user adoption seems to be trending more for Solana than for these other major chains.

Solana’s Market Cap Compared To Other Blockchains

The graph below shows the market cap of Solana, Terra, and Polygon since January 1,2022.

  • On Jan 1, 2022, the market cap of all blockchains was high, and later we saw that all blockchains fell in value and were almost correlated with each other. This was largely due to the volatility on the cryptocurrency markets.
  • Initially the Solana’s market cap is more if we compare with the other blockchains . Later from March 1,2022 onwards we can see the market cap of Terra is increasing than Solana . Due to the LFG, this has happened. According to this proposal, the LUNA price will be $52 fixed rate.
    • Note: What is LFG ? Terraform Labs announced in Jan 2022 the formation of Luna Foundation Guard, which is due to support the $UST peg in volatile market conditions and allocate resources to support Terra ecosystem development.
  • The overall Market Cap shows a decreasing trend this is because of the volatility in the crypto market.
  • According to the tweet below, LFG is in the news.

The following graph shows the percentage change of all blockchains market capital value since Jan 1,2022. Comparing Terra to other blockchains, its market capitalization increased starting in March 2022. This graph clearly illustrates how a percentage of all blockchains’ market capitalization has changed since Jan 2022. Since March 2022, Terra has seen a spike in growth in its market capital, which is unattainable by the Solana. In the beginning, Solana managed a compatible increase and decrease of market capital with other blockchains.

Observations

From the above analysis,

  • Comparing the four blockchains here, Ethereum is the one with the highest percentage of active users since the 1st of February, 2022. Overall, there is also a trend of growing active users across all blockchains. 
  • When we compare the transactions across all blockchains and Solana to all other blockchains, we can see that more transactions occurred on Solana. Solana accounted for more than 90% of transactions. Overall, the number of transactions has decreased.
  • Even though there are not as many active users on Solana as there are on other blockchains, almost 90% of transactions were done on Solana. It is a testament to the success of the Solana Project. The main objective of Solana’s blockchain is to maintain a high TPS in comparison with other blockchains. 
  • Initially the Solana’s market cap is more if we compare with the other blockchains . Later from March 1,2022 onwards we can see the market cap of Terra is increasing than Solana . Due to the LFG, this has happened.
  • And also if we look at the market cap percentage change for all blockchains , Since March 2022, Terra has seen a spike in growth in its market capital, which is unattainable by the Solana. In the beginning, Solana managed a compatible increase and decrease of market capital with other blockchains.
  • Because of this reduction of market cap and all that can occur as a result of current market conditions and fluctuations, Solana, as well as other blockchain networks, are experiencing a slowdown in their growth or activity.

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