While Ethereum remains a leader in the Layer-1 Blockchain space, the two altcoin projects have the potential to surpass Ethereum with superior long-term growth prospects, according to crypto expert Dominic Basulto.
Two important competitors in the leading altcoin: Solana and Avalanche
Solana and Avalanche were two of the worst performing cryptocurrencies in 2022. But that could change in 2023 as they start to deliver on their long-term promises. Despite a series of seemingly uninterrupted market meltdowns and crypto fiascos over the past year, Ethereum (ETH) has emerged as the clear leader of the Layer-1 Blockchain space at the end of 2022. After The Merge, which was successfully completed in September, Ethereum now looks ready for the next round of growth.
This is why some of the older cryptocurrencies such as Solana (SOL) and Avalanche (AVAX), once touted as the ‘Ethereum killer’, have not received as much attention as expected. In fact, Solana and Avalanche were two of the worst performing cryptos of the year in 2022. But as the crypto recovery starts to pick up pace, I think these two could outpace Ethereum in the years to come.
Let’s look at Solana (LEFT) first
For all of the much exaggerated recent network disruptions, Solana remains a faster and cheaper Blockchain network than Ethereum. Related example: Solana can process 50,000 transactions per second, which is nearly equal to what Visa can process (65,000 transactions per second). In contrast, even after Merge, Ethereum is still nowhere near the 100,000 transactions per second originally promised. To make up for its obvious shortcomings in this area, Ethereum relies on a confusing mix of Tier-2 scaling solutions.
Solana’s tremendous speed and production capacity, coupled with very low transaction fees, was what made it important before the market crash in 2022. And now we’re starting to see the various ways Solana can leverage this speed and production capacity for a real competitive advantage. In 2022, it launched two new strategic initiatives, Solana Pay and Solana Mobile. It now plans to integrate them into an inclusive web3 strategy that will include the world’s first crypto phone. The Solana ecosystem thriving in 2023 will include the integration of Helium (HNT), a decentralized mobile network for the Internet of Things.
Moreover, Solana is starting to move away from the dominance of leading altcoin Ethereum in several key verticals. For example, in the Non-Fungible Token (NFT) space, Ethereum has reigned unrivaled, and all of the best new NFT collections have always been launched on Ethereum. This isn’t always the case anymore and Solana is now the number 2 player in the NFT arena. It’s pretty much the same in areas like blockchain gaming and decentralized finance (DeFi), where Ethereum’s first mover advantage is starting to erode.
A strong competitor for the leading altcoin: Avalanche (AVAX)
Similar to Solana, Avalanche came onto the scene with incredibly high transaction processing speeds, low fees, and far greater throughput than Ethereum. There’s a good reason why Avalanche has become a favorite of DeFi users who value speed and pricing when closing transactions. And now it looks like Avalanche is about to take advantage of some of that promise. In terms of DeFi, one of Avalanche’s stated goals is to ‘digitize world assets’ and it has taken several steps forward on that front. A notable example in 2022 was the ability to tokenize a massive, multi-billion dollar healthcare fund from KKR, one of the largest private equity players on the planet.
Avalanche is also building a much wider range of offerings for its ecosystem, including major entries on GameFi (a combination of gaming and finance). But the big news is that Avalanche can sign partnership deals with companies like Amazon. As you follow on Kriptokoin.com, in January, the company’s Amazon Web Services (AWS) unit announced that it will begin offering Avalanche Blockchain services to corporate and government customers. It also signed a partnership agreement with Tencent Cloud, the cloud computing unit of Chinese internet giant Tencent Holdings. If any of these deals turn into something big, it could have a huge impact on Avalanche’s future price.
Should you buy Solana or Avalanche?
From my perspective, Solana and Avalanche still have very interesting long-term growth stories. In 2021, both touted as some of the hottest names to watch in 2022. Instead, we’ve had a series of crashes and booms in the crypto industry. Faced with so many carnage, investors have rightly taken a shortcut to safety. Against this background, Ethereum seemed like the safe option.
But take a look at what has happened so far in 2023. Solana is out the door by 108% and Avalanche is up an impressive 50.8% so far. By comparison, Ethereum is up 30% over the year. In the risk-off scenario, Solana and Avalanche looked like terrible investments. But in a risk scenario, these two altcoins may have superior long-term growth prospects than Ethereum. Therefore, I think both can outperform Ethereum.
The opinions and recommendations in the article belong to the experts and are definitely not investment advice.
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