For many years now Layer-1 blockchain technology has come under fire for its inability to handle the burgeoning pressures of increasing scalability, which has led to extortionate rises in gas fees and network blockages, which have ultimately inhibited trading. With Ethereum becoming one of the most scrutinised Layer-1 blockchains, this has enabled other competing blockchains to rise through the ranks and position themselves as strong contenders against the infamous number-two crypto.
Offering sustainable resolutions to the prolonged issues faced by the Ethereum blockchain, many upcoming Layer-1 blockchains are poised to take Ethereum’s crown as they continue to gain traction and rise through the crypto market. Whether their selling point is due to their compatibility with Web3 and metaverse technology, or their ability to handle more traffic at a minimal cost, competitors such as Solana, Avalanche, and Polkadot are set to present an immense challenge to Ethereum, and each other, throughout 2022.
Solana
Perhaps one of the most significant smart contract platforms within the current cryptocurrency market, the blockchain technology and power harnessed by Solana ranks it as one of the biggest competitors throughout this coming year.
Taking advantage of a permissionless ecosystem, Solana enables developers to create and deploy different DeFi solutions and platforms, as well as creating their own native tokens. In doing so, Solana protocol primarily facilitates DApp (decentralised application) development and aims to increase scalability within these applications through a transparent proof of history (PoH) consensus in tandem with a proof-of-stake (PoS) infrastructure. With the former consensus developed by Anatoly Yakovenko, the innovative application of this within Solana’s infrastructure enables ever increasing scalability and boosts usability, thus reducing the likelihood of network congestion or traffic.
Designed to offer lightning fast processing speeds and minimal transaction fees, Solana pledges to its users that they will never be surprised by unforeseen taxes or fees, thus attracting the interest of retail investors and institutional investors alike.
Throughout the past year, Solana has been subject to one of the most significant bull runs in its history, soaring over 700% since July 2021 alone. Entering Q2 of 2021 at a modest $14.96, Solana has since soared through a market landscape flush with green candlesticks, leading it to reach an all time high of $260.06 in November of the same year. Solana has since fallen 64% from its former high to a subdued $93.20, yet this is yet to deter its momentum. Whilst Solana’s entry into 2022 has demonstrated a significant downward spiral into the lower bounds of the $90-100 range, Solana is raring to accelerate its momentum as the next bull run cycles round.
With various upcoming projects related to metaverse development and innovative DeFi technology, Solana is yet to settle down, instead asserting itself against Ethereum as one of the most significant projects in recent years.
Avalanche
Avalanche is a rising Layer-1 blockchain that aims to deliver efficient smart contracting, customised blockchain creation and deployment, as well as the ability to deploy decentralised applications. Acting as a member of the ‘Ethereum Killers’ brigade, Avalanche has grown in prevalence across recent years for its significant blockchain power and technology.
Boasting a transaction output of 6,500 per second, Avalanche is renowned for delivering immensely scalable technology without compromise to their users. Due to its unique architecture, Avalanche is capable of harnessing the individual power of each of its individual blockchains: X-Chain, C-Chain, and P-Chain; each of which performs specific functions that contribute to the overall functionality of the network. With each chain performing radically different functions, it comes as no surprise that each is built from different consensuses and infrastructures suited to the use case of each - which further sets it apart from the likes of Ethereum.
Avalanche witnessed a strong entry into 2022, starting at $110.80,yet it has since fallen below its 90-day SMA and has been trading within the upper and lower bounds of $100-50 consistently throughout Q1. Yet, Avalanche’s volatility coincides with the remainder of the market thrust into a bearish landscape, which has rained red across almost every asset in the top 100. Prior to 2022, Avalanche was soaring upwards, with November 2021 marking its significant all time high of $146.22, where it continued to bounce between the upper regions of $130-140 throughout the remainder of 2021.
Whilst it may appear that the valuation of Avalanche is suffering, this is likely to cease in the coming months as Avalanche continues to partner with metaverse and Web3 developers such as PDAX, which will likely accelerate their success to new heights.
Polkadot
Built by a co-founder of the Ethereum network, Polkadot has the loveable essence of Ethereum whilst also building upon the infamous faults within its infrastructure to offer a more robust and scalable blockchain.
Developed upon an open-source sharded multichain protocol, Polkadot connects and interlocks various specialised blockchains in a secure manner to facilitate cross-chain transfer of any data or assets, not just tokens, thus prioritising interoperability. Additionally, Polkadot was founded as a basis for several decentralised blockchains to build upon to create an ‘internet’ of decentralised technology, otherwise known as Web3.
Whilst not typically fitting the archetype of a Layer-1 blockchain, Polkadot is often regarded as a Layer-0 metaprotocal due to the way in which it underlies and creates a format for various Layer-1 blockchains or parachains. Additionally, the Polkadot network bridges private and public blockchains, permissionless networks, oracles, and future technologies, which enables them to trustlessly share information and transactions utilising the Polkadot Relay Chain.
Entering 2022 on a spiralling downwards trajectory, Polkadot’s valuation has suffered amidst the current bear market, yet only a few months prior Polkadot soared into price discovery after reaching an all time high of $55 in early November. Currently holding strong towards the upper bounds of the $15-20 region,Polkadot appears to be coasting in the current market, actively seeking an opportunity to soar in value and trade within the bounds of its 90-day-SMA. However, James Wo’s recent interview where he divulged into the capabilities of Polkadot’s technology and the associated parachain technology, may spur momentum as the true benefits of Polkadot’s technology are to be revealed in coming Web3 developments.
The Bottom Line
With many competitors hounding Ethereum, it can be ascertained that the competition between each network will continue to accelerate - particularly in light of the delays to the deployment of Ethereum 2.0. As further developments are integrated into the competing blockchains‘ respective infrastructures, Ethereum may have a challenging remainder of 2022.
However, only time, volatility, and the forthcoming market landscape will reveal whether these ’Ethereum Killers‘ can begin to outshine the notorious Layer-1 ruler.
Author:Matthew W-D, Gate.io Researcher
*This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.
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