Anatoly Yakovenko explains the “fundamental” difference between Solana and Ethereum

Solana co-founder Anatoly Yakovenko recently pointed out that there are significant differences in how Solana and Ethereum view resource saturation and price discovery.

He explained that once global resources become saturated with Solana, the current pricing mechanism will begin to become suboptimal. Although Solana's congestion implementation is much more sophisticated than most cryptocurrencies, Yakovenko made it clear that the underlying hardware would need to be scaled to efficiently handle new demands. I made it.

The Ethereum vs. Solana debate continues to be salivating for retail investors, and institutional investors continue to win in that respect. Although it has generally performed much better than its sister cryptocurrency Ethereum on many performance metrics, one very important question to answer is: Why is Solana still more focused on institutional adoption than Ethereum? “Isn't it?”

Solana's Anatoly Yakovenko challenges Ethereum's scaling model

Anatoly Yakovenko, one of Solana's founders, recently outlined the essential differences between Solana and Ethereum's visions regarding resource saturation and price discovery.

I think the fundamental difference between solana's vision and Ethereum's vision is that price discovery doesn't work in solana when global resources are saturated.

Although this is a good way to handle congestion, it essentially requires the hardware to scale up to meet new demands. if…

— Tori🇺🇸 (@aeyakovenko) October 18, 2024

He made the important point that once some global resources on Solana become saturated, the current pricing mechanism will no longer work as expected. In other words, while Solana may have a fairly sophisticated way of dealing with congestion compared to many other cryptocurrencies, Anatoly Yakovenko said the hardware could be expanded to meet new demands. said it was necessary to do so.

If validators are able to scale up their hardware capacity but cannot meet demand, the system will fail. The only thing that actually affects user prices is local contention, an issue that cannot be mitigated, he said. This perspective highlights Solana's focus on scaling and efficiency when it comes to network congestion compared to Ethereum's approach.

Macro researcher Axel Adler Jr. also agreed with Solana's price increase, recently saying that SOL could benefit from the overall positive market sentiment expected after the halving.

Recently, Orderly Network announced its integration with Solana via social media. This marks a significant milestone in becoming the first full-chain orderbook platform to support both Ethereum Virtual Machine (EVM) and non-EVM ecosystems. This integration will enable users across different public chains to trade perpetual contracts using Orderly Network's integrated cross-chain shared order book, enhancing trading functionality and accessibility.

This move is seen as a strategic effort to expand the user base and liquidity options for traders within the Solana ecosystem.

Energy consumption is key to Bitcoin vs. Ethereum battle

Just recently, Anatoly Yakovenko drew everyone's attention by comparing the Ethereum and Bitcoin debates. He put these two giants on the same scale, especially considering energy consumption and capital expenditures. During that discussion, he told everyone that even though Ethereum and Bitcoin are similar to each other, their energy usage causes significant differences in their cost structures.

According to him, Bitcoin operates on a proof-of-work model, which requires a huge amount of energy due to the computational power of miners. In contrast, Ethereum moved to a proof-of-stake model, significantly reducing energy consumption and essentially reducing capital expenditures.

In response to a user's question about the possibility of Ethereum reaching a higher market value than major cryptocurrencies, Anatoly Yakovenko also said, “If Ethereum's adoption turns out to be slower than Bitcoin, it will probably “Increased prices may not be justified.” Ethereum remains the largest decentralized smart contract platform. However, it hasn't seen as much real-world adoption or as dramatic a rise in price as Bitcoin, especially recently as macroeconomic conditions have started to change.

Analysts expect SOL’s price to reach triple-digit territory, nearly 10 times higher than current levels, and say there are three reasons why SOL has overtaken ETH.

Contrary to expectations after Ethereum's transition to PoS, price performance lagged slightly compared to Bitcoin. This has led to increased discussion within the community regarding further price trends and the competitiveness of Ethereum and Bitcoin. Such discussions would confirm the competitive nature of the crypto space regarding sustainability and investment viability.