7 Reasons why Solana Platform is the Future for DeFi Projects

The blockchain is perhaps one of the most convenient advancements in technology. With decentralization ruling out Know Your Customers (KYC) requirements, it’s been easy for investors to create their wallets and connect to trading platforms. With blockchain giving users so much freedom to initiate transactions, strangers can execute agreements with other strangers without knowing their names and locations.

Ethereum vs Solana

Different blockchain technologies are popular among investors, including Ethereum and Solana. Ethereum is a decentralized, open-source blockchain that uses smart functionality to support blockchain projects, while Solana Blockchain focuses on scalability and fast performance. The number of users on Ethereum Blockchain is increasing, which makes it weaker. Restrictions are also a disadvantage for Ethereum users. Solana, on the other hand, is proven to have more advantages because of its main features.

In case you’re curious as to why the Solana platform is the future for more Defi projects in the coming years, here are seven reasons why.

1. Faster and Scalable

Solana is popular for its scalability, which is the capacity to change in scale. The blockchain’s scalability allows Defi projects to focus on their business rather than on their infrastructure. Solana helps users experience faster technology while the ecosystem is expanding. Its scalability means Defi projects don’t have to sacrifice their security anymore with the blockchain’s continuous upgrades. Solana is indeed faster and more environmentally-friendly than Ethereum. If Solana can pass the Ethereum barrier, this blockchain may be used more broadly.

2. A strategic investment approach

Solana has generated approximately $26 million up to date by offering SOL tokens. While offering its own tokens has been a great investment approach for the blockchain, having blockchain projects as successful as Parsiq saves it from more headaches as it expands its stack. Parsiq is a blockchain data monitoring platform built on Solana. Its blockchain protocol made it garner around $3 million in funds in June 2021. And guess what made investors invest in Parsiq? The blockchain protocol itself. This is a good indicator that Solana will drive more funds if future Defi projects are built on it.

3. Proof of history

We bet you’ve heard about Proof of Work and Proof of Stake. While these two concepts talk about creating new blocks on the blockchain, which almost all blockchain technologies have adopted, Solana has been nothing but different. This blockchain introduces Proof of History, a concept where the Solana blockchain uses some kind of a synchronized clock that designates a timestamp for each transaction. This idea disables miners and bots to have control over the order of transactions recorded on the blockchain. Proof of history tightens security and censorship resistance.

4. Continuous innovation

Solana is up to more upgrades and innovation. Aside from Proof of History, you might also encounter Tower BFT, a Proof of History-optimized Practical Byzantine Fault Tolerance (PBFT), Turbine, a block propagation protocol, Gulf Stream, and Pipelining. These innovations may seem foreign to you, but as you explore Solana, especially if you are looking to develop a blockchain project, you will know more of these things.

5. Low costs

Another reason why Defi projects will choose Solana in the future is because of its low fees. Developers never have to worry about the charges when their user base expands. Solana is designed to keep the fees low while projects cater to billions of users.

6. Composability

Solana’s composability is an advantage for Defi projects. Why? Because this helps them run their protocols while not worrying about multiple shards or layer two systems. Composability is a super feature for developers as it enables them to compose building blocks together to make something new.

7. The Ethereum killer

Solana will soon become the Ethereum Killer. There are rumors that the blockchain is working on something to raise $450 million funds to develop a new update that will totally outperform Ethereum. However, the team has no feedback on this hearsay. But what we know about Solana is that it’s becoming more and more useful for blockchain projects. Investors are also considering the protocol so they can invest more. If your project will be built on Solana soon, this means that it will be easier to look for investors if you use this blockchain.

Conclusion

The blockchain keeps on evolving. The competition is high, yes, but Solana is surviving the challenges so far. The updates on this blockchain protocol are magnificent as it introduces new things that developers and users can explore. As of this writing, Ethereum is set to launch its Ethereum 2.0 that will solve the bottlenecks on its current version. But Solana? It’s in a better state than Ethereum because of its main qualities — fast, scalable, and composable.

Follow us on LinkedIn: https://www.linkedin.com/company/soldex/about/