It's hard to find an asset that has outperformed Ethereum's (ETH +0.39%) 5,500% return over the past five years. The world's top programmable blockchain certainly has its fair share of supporters in the crypto community, but there are some younger rivals making a push to dethrone Ethereum's top standing.
Let's take a look at why Cardano (ADA 1.14%) and Solana (SOL +1.06%) are two top cryptocurrencies that could outpace Ethereum over the next decade.
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1. Cardano
Cardano was founded in 2017 by Ethereum co-founder Charles Hoskinson, and the price of Cardano's native token, Ada, has soared nearly 3,500% since its launch. It is now the ninth-most valuable cryptocurrency, carrying a market capitalization of $27.9 billion (as of April 26). Like Ethereum, Cardano's blockchain allows for the use of smart contracts, or self-executed computer programs that run based on a set of pre-determined conditions.
But what separates Cardano from other networks is its thorough development process. New updates are introduced using a research-based, peer-reviewed system, ensuring that all opportunities and weaknesses are considered before any changes are implemented on the blockchain. Cardano's final upgrade phase, known as Voltaire, will introduce governance features.
Thanks to its proof-of-stake (PoS) Ouroboros consensus mechanism, which lets token holders verify transactions based on how much Ada they own, Cardano can process 250 transactions per second (TPS) today. That's far greater than Ethereum's 12 to 15 TPS. Therefore, it's no wonder that Cardano shows promise when it comes to decentralized applications. It is already working on real use cases in a range of industries, like supply chain tracking in agriculture and preventing counterfeit medicine in the healthcare sector.
Cardano still has a long way to go to catch Ethereum's dominance, but its progress thus far is an extremely encouraging sign of things to come.
CRYPTO: ADA
Key Data Points
2. Solana
Solana also supports smart contracts, which opens up the possibility of a number of use cases. It was released in 2020 by ex-Qualcomm engineers Anatoly Yakovenko and Greg Fitzgerald. The price of Sol, the native token, has jumped 10,500% since its founding. Solana is currently the sixth-most valuable cryptocurrency, with a market cap of $32.2 billion (as of April 26).
Like Cardano, Solana utilizes a PoS system to verify and add new transactions to the blockchain. However, what makes Solana's network special is something called proof of history. This system speeds up processing times by adding a timestamp to each block. And it's why Solana can currently process an incredible 50,000 TPS.
This tremendous speed makes Solana interesting in the world of decentralized finance. Solana Labs, the developer behind Solana, recently introduced Solana Pay. This is an innovative digital payments system that directly connects merchants and consumers with essentially zero fees. It can also help to drive loyalty and repeat visits, and develop deeper customer relationships by incorporating non-fungible tokens and rewards during the purchase, all on the blockchain. This will be an exciting project to pay attention to.
Because of its speed, Bank of America analyst Alkesh Shah earlier this year said Solana could become "the Visa of the digital-asset ecosystem." That's quite the endorsement, and it shows the promise this blockchain has.
CRYPTO: SOL
Key Data Points
Watch out for the "Ethereum killers"
Although Ethereum is the second-largest cryptocurrency, with a market cap of $340 billion as of this writing, it has undoubtedly struggled with scalability issues up to this point. And this opens up the opportunity for blockchains like Cardano and Solana to try to solve this problem. Being able to handle a higher number of transactions is certainly necessary if cryptocurrencies have a shot at becoming widely accepted.
The asset class is still in its early days, but there is a lot for investors to get excited about. Keep an eye on the progress that Cardano and Solana make in the decade ahead.
