Blockchain and Web3 are becoming intertwined with various parts of our lives. Despite Ethereum being the number one smart contract-enabled blockchain, several competing blockchains are striving to provide scalable, low-cost alternatives to meet the growing demands of Web3 users. However, network congestion, slow transaction speeds, and high fees present challenges for scaling the Ethereum blockchain. Both Solana and NEAR Protocol aim to address this issue by providing super-fast and low-cost blockchain networks that can scale. Furthermore, Solana and NEAR are experiencing significant institutional adoption, suggesting that both could compete with Ethereum in the long term. So, if you’re one of the many people wondering which is the better blockchain network between Solana vs NEAR, read on!
In this “Solana vs NEAR” article, we’re going to dive deep into two of the most prominent Ethereum competitors. We’ll provide an overview of each network and compare some of the key metrics regarding performance and usability. Also, we’ll explore how each blockchain network aims to solve the “blockchain trilemma” of scaling without compromising security and decentralization.
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Founded in 2017 by Solana Labs and maintained by Solana Foundation, Solana is a public blockchain network with smart contract functionality. It achieves incredibly high transaction throughput without the use of layer-2 scaling solutions. Until February 2022, Solana was the fastest public blockchain network in the world. However, the recently launched Bitgert Chain has since become the fastest blockchain.
Solana uses a hybrid proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanism. The native SOL token plays a crucial role in securing the network via PoS consensus. Furthermore, the PoH mechanism is the first “clock-before consensus” algorithm that allows the Solana network to achieve consensus without latency.
Solana was created to address the “blockchain trilemma” of scaling a public blockchain network without compromising security or decentralization. Accordingly, Solana is home to a thriving ecosystem of decentralized applications (dapps). Save our Solana vs Ethereum article to see how Solana compares to the leading smart contract blockchain. Also, if you want to learn how to build smart contracts (programs) on Solana, check out the Rust & Solana Programming 101 course at Moralis Academy. This course teaches you everything you need to know about using the Rust programming language and Solana to build dapps. In addition, this course requires no previous experience with smart contract programming. Start building dapps on Solana today with Moralis Academy!
The Solana blockchain features various innovative components that allow it to scale without using layer-2 networks. For example, “Sealevel” is the world’s first parallel smart contracts runtime that enables Solana to process tens of thousands of smart contracts simultaneously. This is a significant improvement on single-threaded Ethereum Virtual Machine (EVM) or WebAssembly (WASM)-based runtimes.
Solana validators operate in “clusters” for specific tasks throughout the network. Further, Solana validation benefits from much of the same localization as sharded blockchains. In addition, Solana uses the “Gulf Stream” transaction forwarding protocol that eliminates the need for mempools. Other novel features include the horizontal accounts database called “Cloudbreak”. Also, it includes the proof-of-history (PoH) “clock before consensus” mechanism and the “Turbine” block propagation protocol.
NEAR Protocol – a smart contract-enabled blockchain and data storage network founded by Alex Skidanov and Illia Polosukhin. It serves as a community-operated cloud infrastructure for hosting dapps that enables developers to build and deploy smart contracts quickly and securely with minimal costs. The native NEAR token plays an essential role in securing the network via the NEAR Protocol PoS consensus mechanism. Also, NEAR uses a process called “sharding” to address the issue of scaling public blockchain networks.
Instead of long-string account numbers (such as a 42-character long wallet address), NEAR Protocol uses human-readable addresses (i.e., “yourname.near”). In addition, NEAR Protocol features an Ethereum bridge called “Rainbow Bridge” that allows users to seamlessly transfer tokens between the two blockchain networks. Plus, developers can take advantage of the Aurora layer-2 scaling solution. Aurora uses Ethereum Virtual Machine (EVM) to enable developers to launch Ethereum smart contracts on NEAR. As a result, users can enjoy the low fees and high transaction throughput of NEAR Protocol while using familiar Ethereum tooling.
Nightshade is the name of the sharding technology underpinning the NEAR blockchain. Unsharded blockchains require each node in the network to maintain a full copy of the blockchain ledger. However, sharding technology such as Nightshade enables nodes to only carry a fraction of the ledger. As such, the NEAR blockchain processes data extremely efficiently with low costs. Plus, Nightshade allows the NEAR blockchain to process more transactions per second (TPS).
Sharding involves splitting blockchain infrastructure into multiple segments to reduce the computational burden that nodes experience. Accordingly, NEAR nodes only have to store a small portion of transactional data instead of the entire blockchain. Furthermore, sharding helps minimize transaction fees throughout the network while increasing transaction throughput to support the growing demands for Web3 technologies. Plus, it helps minimize points of failure because nodes are only responsible for the upkeep of small parts of the blockchain.
Nightshade validators do not have to compete for the next block according to the size of their stake. Instead, NEAR Protocol uses an election mechanism known as “thresholded proof-of-stake” (TPoS) for validator nomination. TPoS works a bit like an auction. A pool of potential validators each makes a bid that indicates the number of NEAR tokens they are prepared to stake. The TPoS mechanism then creates a threshold for validation. Any validator who has staked above the threshold can participate in network validation and earn the relevant rewards proportional to the size of their stake.
The Solana Token (SOL) vs the NEAR Protocol Token (NEAR)
The SOL token and the NEAR token play an essential role in securing their respective networks via PoS consensus. Also, both tokens grant holders governance rights, allowing them to vote on proposals to make changes to each respective network. However, the NEAR token has an additional use case as it is also used to pay for data storage. In addition, smart contract developers on NEAR receive 30% of all transaction fees throughout the network as an additional incentive to build dapps on the NEAR blockchain.
Both tokens have experienced sustained periods within the top 100 cryptocurrencies. However, the SOL token has outperformed the NEAR token, becoming an almost permanent top ten crypto asset by market cap. According to CoinGecko, the SOL token ranks the highest out of the two cryptocurrencies, ranking ninth, with a market cap of $9.5 billion. On the other hand, the NEAR token ranks 29th, with a market cap of $2.4 billion.
Solana vs NEAR
Now that we’ve explored both blockchains, let’s make a comparison between Solana vs NEAR Protocol. The Solana mainnet launched in March 2020. Also, NEAR Protocol’s mainnet went live in April of the same year. After launching, the Solana blockchain made headlines by becoming the fastest blockchain in the world, with a throughput of around 65,000 transactions per second (TPS). However, several blockchains have matched this in recent months. Furthermore, NEAR Protocol claims to be able to process around 100,000 TPS, making it one of the fastest to date.
According to DeFi Llama, Solana harbors $2.88 billion in total value locked (TVL) at the time of writing. On the other hand, NEAR Protocol only has $322 million in TVL. Furthermore, Solana has approximately 1,470 nodes at the time of writing, whereas NEAR has only 720. Also, the average transaction fee on Solana is between $0.00001 and $0.00025. On NEAR, transaction fees are also quite low. However, the calculations for transaction fees are slightly different.
That said, we can calculate an approximate average for transaction fees by looking at the cost of interacting with dapps on NEAR. For example, when interacting with Ref.finance, the most popular dapp on NEAR, users pay around 0.001 NEAR per transaction. At the time of writing, this equates to approximately $0.0034.
Building dapps on Solana and NEAR provides a low-cost, high-speed alternative to Ethereum. When it comes to building on Solana, developers can choose between the Rust, C, and C++ programming languages. On NEAR, developers can choose between Rust and AssemblyScript. However, Rust is the predominant language.
The Phantom wallet is the predominant crypto wallet used throughout the Solana ecosystem. It is a straightforward non-custodial Web3 wallet that gives users access to their own private keys. NEAR Wallet is the proprietary crypto wallet for the NEAR network. However, users can interact with NEAR using MetaMask via EVM-compatible Aurora.
Despite this, the SOL and NEAR tokens are available on multiple EVM-compatible blockchain networks. As such, users can gain price exposure to each asset. However, they are unable to participate in consensus or staking without using a native wallet such as Phantom or NEAR Wallet.
Furthermore, some teething issues became apparent when NEAR Protocol began rolling out the first of the shards that will eventually form the infrastructure of the network. However, these issues were quickly resolved. Until now, it appears that the Solana network still has a way to go to address the recent outages.
Solana vs NEAR: Which One Comes Out on Top? – Summary
So, which blockchain comes out on top regarding Solana vs NEAR Protocol? Well, both blockchains are highly scalable with a low carbon footprint. Also, each network features an Ethereum bridge and is compatible with Ethereum Virtual Machine (EVM). Accordingly, Ethereum developers can deploy Solidity smart contracts on both Solana and NEAR. However, Solana is certainly the more established network of the two. Despite both networks launching roughly at the same time, the Solana blockchain has considerably more users and decentralized applications (dapps) built on it.
Furthermore, Solana has roughly double the amount of active nodes that NEAR Protocol has. As such, one might consider Solana to be more decentralized and resistant to attacks than NEAR. Despite this, both blockchains boast ultra-low translation fees and super-fast transaction speeds. Plus, both blockchains aim to solve the blockchain trilemma of maintaining security, decentralization, and scalability.
In addition, both Solana and NEAR Protocol use the Rust programming language. Despite both platforms being EVM-compatible, this could serve as a barrier to entry for some developers who are unfamiliar with Rust.
Also, don’t forget to follow us on Twitter @MoralisAcademy. We’d love to hear your thoughts about the differences between Solana vs NEAR Protocol. In addition, check out our “Understanding Crypto Crashes” and “How to Invest During a Crypto Bear Market” articles to learn how to navigate market downturns!