Algorand and Solana are both high performance layer 1 blockchains that pride themselves on their performance and ecosystems, but which is better? In this article we’ll give into both algorand and Solana to help you understand the technology and the fundamentals behind the two.

Algorand vs Solana

Algorand vs Solana

 

What is Solana?

Solana Logo

 

Solana is a decentralized layer 1 blockchain built for its speed and low transaction costs, using a proof of stake consensus mechanism Solana has been able to achieve very low transaction costs and fast transaction speeds. Due to this Solana developed a thriving NFT ecosystem early in 2020 that rivals even Ethereum’s NFT ecosystem in terms of daily transactions and volume.

Founded in 2018 by San Francisco based Solana Labs the blockchain quickly gained the attention of large VCs such as Sam Bankman Fried the founder of since collapsed crypto exchange FTX. This is one blemish on the blockchain that some of the crypto community likes to point out, the large amount of VC backing that Solana has received.

The NFT ecosystem that Solana has developed accounts for a very large amount of the network usage and has helped crypto onboard users in a huge way with its low transaction costs. The network saw a lot of users that could not afford Ethereums high gas fees move over to Solana. Solanas simple usability and user friendly wallets such as Phantom was a huge factor in its popularity and traction.

Pros

Through Solana proof of stake mechanism the network is able to maintain translation speeds of over 4,000 transaction per second while under a heavy traffic load, theoretically as the development team keeps working on the blockchain they hope to achieve 65,000 transaction per second, in comparison to Ethereums 15 transactions per second this is a huge jump up and why Solana has occasionally been touted as an “Ethereum Killer”.

Solana TPS Graph

 

To match Solanas fast transaction speeds the network also offers transaction fee at a fraction of the cost of its competitor Ethereum, at just $0.00025 per transaction it is clear why the NFT ecosystem flourished so much and gained so much traction as people were fed up with paying high gas fees on Ethereum during congestion.

Cons

Some may see Solana not being EVM compatible as a disadvantage as it excludes all of the Solana protocols and smart contracts from the Ethereum ecosystem. Solana was built to be a direct competitor to Ethereum and not to run alongside it, hence the blockchain not being compatible with Ethereum.

In comparison to Ethereum, Solana does lack an established DeFi ecosystem, don’t get me wrong there are a handful of DeFi protocols on Solana however in comparison to Ethereum and other chains the DeFi ecosystem is lacking, Solana does however make up for this with its thriving NFT ecosystem.

What is Algorand?

Algorand Logo

 

Algorand is a decentralized blockchain built with the goal in mind to solve the blockchain trilemma of scalability, decentralization and security, similar to Solana, Algorand has been touted as an “Ethereum killer” due to its speed and advanced capabilities.

Algorands institutional grade blockchains gives developers a decentralized blockchain to build on without sacrificing any scalability while maintaining a high level of security and staying environmentally sustainable.

Algorand uses a proof of stake consensus mechanism where they are chosen at random to confirm transactions; any user of the Algorand network can participate in these blocks by staking their ALGO tokens in a node. This consensus mechanism allows the blockchain to be decentralized and more secure than other rival blockchains. The more ALGO that is held by a node the more likely they are to be chosen to validate the new blocks and transactions.

Using this proof of stake consensus mechanism Algorand claims to be able to process upwards of 6,000 transactions per second with near instant finality making it on paper one of the fastest blockchains on the market.

Pros 

One of Algorands big selling points is its ability to be carbon negative while offering instant finality transaction speeds and low transaction costs, this creates a perfect environment for a payments focussed network allowing users to send transaction near-instantly achieving finality in less than 5 seconds and for a fraction of the cost of a lot of competing blockchains.

In 2022 Algorand announced $20 million dollars in funding to help accelerate the Algorand ecosystem with $10 million of the fund going to developers to help create solutions to make Algorand EVM, this would mean that dApps built on Ethereum can also be run on Algorand making the barrier of entry for developers building and launching on Algorand much lower.

What are the downsides of Algorand?

At the time of writing this Algorand does not have the same level of adoption as Solana does and so has a seemingly lacking ecosystem, due to this we have also not seen how the Algorand blockchain handles high amounts of traffic and if it will experience congestion.

Is Algo faster than Solana?

Looking at the transaction speeds of both Algorand and Solana while taking into consideration the amount of traffic the blockchains are processing the answer is no, Algo is not faster than Solana. Currently Solana is capable of processing transactions faster than Algorand while processing more traffic without any major congestion.

Which is better, Solana or Algorand?

Now the answer you are most likely here for. On paper both blockchains have a similar level of technical capabilities however only one of the two have the ecosystem and the community and that is Solana. Even though Algorand has possibly slightly faster transaction speeds the Algorand blockchain has not had the level of transactions that Solana has had so it is hard to say how it will handle that high of a load.

Solana also has a huge NFT ecosystem and community that rivals even Ethereums and also offers a very user friendly experience making it a super easy blockchain to onboard new users onto, for those reasons we are going to give Solana the slight competitive edge in this match up.