The world of finance has been experiencing the impact of blockchain technology for a considerable time. The use of blockchain technology range from accounting, auditing, gaming, and real estate to supply chain management, and many others. The security and privacy that blockchains provide enable these applications to function seamlessly. Although Ethereum has established itself as one of the leading blockchains, there are other emerging blockchains that were rumored to be “Ethereum killers” and are challenging Ethereum’s dominance.
Ethereum: A Leading Blockchain Next to Bitcoin
After Bitcoin, Ethereum is one of the popular blockchain networks in the crypto industry. Open source software is a decentralized blockchain that functions with smart contracts. The brainchild of Vitalik Buterin was launched in 2015 and has more than 11,900 active nodes. In 2022, the Ethereum network switched from a Proof of Work (POW) to a Proof of Stake (POS) consensus mechanism. Also known as the merge, it successfully reduced the energy consumption of blockchain by more than 99%. There is an unlimited supply of ETH coins in the market. As of the first week of April, the value of ETH was valued at $1870, with a market cap of $225,297,663,877. While the network has excellent security features, the high gas fees, and slow transaction process are some of the drawbacks of the coin.
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Who Are the Ethereum Killers?
An ETH killer refers to a Layer 1 blockchain designed to replace Ethereum by addressing its challenges. To qualify as an Ethereum killer, the blockchain must focus on resolving Ethereum’s issues and eventually replace it in the cryptocurrency market.
Ethereum’s development team is working on upgrades to address its limitations, but these upgrades have been slow. Consequently, ETH killers are taking advantage of this prolonged timeline and competing for a top spot in the crypto market by offering faster transaction processing times and lower fees.
However, each ETH killer has its unique features and capabilities. Although these blockchains often receive considerable attention initially, none have succeeded in replacing the Ethereum ecosystem yet.
5 Top Ethereum Killers Vs. Ethereum
Decentralized finance (DeFi) ecosystems known as “ETH killers” have been created as Layer 1 platforms or some Layer 2 solutions to compete with Ethereum. Despite some similarities with Ethereum, they possess unique features and advantages that distinguish them from Ethereum. These platforms have been in operation for several years and have gained significant popularity. However, it is uncertain if any of them will eventually surpass Ethereum.
Solana emerged as an alternative to Ethereum and gained attention for its proof-of-history consensus mechanism that uses time stamping to facilitate faster processing times, enabling it to handle more than 4,000 transactions per second. This is in contrast to Ethereum’s capacity to process only 13.2 transactions per second, and Solana also has lower fees. Currently, it is mostly used for NFTs and gaming, with an NFT sales volume of $4.46 million, which is more than four times lower than Ethereum. As of April 4, 2023, SOL has a market cap of $7.95 billion. Despite being affected by the FTX exchange collapse, Solana remains strong. The platform plans to launch a web3 mobile phone to provide more benefits to its users in the future.
Polkadot is another Ethereum competitor that utilizes a PoS protocol but has a different approach to scalability. While it processes transactions at a rate of 1,000 TPS, it surpasses Ethereum in actual speed. The platform has a unique architecture, allowing multiple chains to coexist on one relay chain, enhancing scalability, and improving blockchain security. Furthermore, developers can create their own blockchains called parachains. DOT’s market cap is $7.83 billion as of the first week of April.
Launched in 2017, Polygon serves as a Layer 2 solution for the Ethereum blockchain, providing users with greater scalability and flexibility, lower transaction fees, and the ability to have ownership of their blockchains. It also offers the benefits of Ethereum’s security. Moreover, Polygon allows for seamless communication between different blockchains, including Ethereum. As of the first week of April, the market cap of MATIC, Polygon’s native token, is $10 billion.
Cardano is another Ethereum competitor that uses the Ouroboros mechanism to process a greater number of transactions than Ethereum can handle, and it supports smart contracts and DeFi projects. The blockchain was launched in 2017 and has benefited from two major upgrades, the Alonzo upgrade in 2021 and the subsequent Vasil hard fork upgrade in 2022. The Alonzo upgrade improves the Cardano blockchain’s programming capabilities to make it more suitable for NFTs and smart contract projects, while the Vasil upgrade enhances the overall functionality, robustness, and scalability of the blockchain. Additionally, Cardano employs a peer review system for quality control after upgrades. The platform has a capacity of up to 250 TPS and a market cap of $13.69 billion.
Avalanche is an Ethereum competitor that uses PoS and has a unique feature of integrating three interoperable blockchains, providing greater scalability than Ethereum and other ETH killers. As of April 4, 2023, Avalanche’s market cap is $5.6 billion.
What is the Future Of Ethereum Killers?
There are numerous Ethereum competitors in existence today, each attempting to provide a better alternative to Ethereum. Although these other blockchains have taken a significant portion of the crypto market share away from Ethereum, Ethereum still holds a substantial amount of the market share compared to any other single platform.
Like Ethereum, ETH killers also have planned upgrades that will enhance their appeal further. These upgrades could attract more attention away from Ethereum, and additional ETH killers will likely emerge to further fracture the market share. As a result, it may become increasingly difficult for any single blockchain to be as dominant as Ethereum once was. It is reasonable to speculate that there may be multiple DeFi and NFT blockchains, each with unique standout features and benefits.
The Bottom Line
In recent years, ETH killers have received significant attention due to their potential advantages over Ethereum. However, even the top ETH killers have their own disadvantages. It is unlikely that any one blockchain will become as dominant as Ethereum was in the past. As a result, ETH killers offer developers and users more options to choose from, rather than replacing Ethereum entirely.