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- Solana has attracted developers as a faster and cheaper blockchain than Ethereum.
- The founder of one major Solana-based project said he's not discouraged by the network's outage earlier this week.
- Insider also spoke with a partner at a crypto investment fund, who sees a "multi blockchain world" where solana, ethereum, and other networks coexist.
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Michael Wagner has large ambitions for his blockchain-based multiplayer game, Star Atlas. He sees his beta-stage product where players explore outer space eventually morphing into a "metaverse," and told Insider he wants the user base to expand to "the entire global population."
A game that can support that kind of user base needs a web-scale, layer one blockchain protocol that's scalable and low-cost, Wagner said. That's why he and his team chose to build Star Atlas on solana in August 2020, joining about 20 other projects that had been built on the blockchain.
A year later, Wagner says there's over 500 projects built on the network, and solana's SOL token has soared to over $150, boasting a year-to-date gain of nearly 8,300%.
The gain has been in part driven by developers like Wagner, who were looking for a network that could process transactions faster and cheaper than ethereum, the blockchain where most decentralized projects currently exist.
While solana was processing 2,000 transactions per second on Friday, ethereum was only processing about 14, and while each transaction costs about $5 on ethereum, solana boasts a transaction fee of less than a penny.
Developer interest and activity on solana grew so much over the last few months that the network's transaction load peaked on Sept 14, resulting in an outage of over 17 hours. The company said ''intermittent instability" had disrupted some services on Tuesday, after solana's transaction load peaked at 400,000 transactions per second.
The network is back up and running now, and Wagner said he wasn't discouraged by the outage, but rather impressed with the network's "expediency of resolution."
"Solana was capable of handling greater than 400,000 transactions per second prior to the failure, which is being rapidly resolved, " Wagner said. "This demonstrates the true potential of a web scalable blockchain, and furthers my resolve in building Star Atlas with solana as the foundational protocol."
In the wake of the outage, investors may be wondering where solana will fit into the ecosystem of layer-one blockchains, especially as ethereum stands as the dominant platform for decentralized applications.
Seth Ginns, managing partner at investment firm CoinFund, sees a "multi-blockchain world," where developers examine the trade-offs of each protocol and choose to build their project on whichever blockchain best provides what they need.
Traditional financial applications that need fast transaction speeds are well suited for Solana, Ginns told Insider. Meanwhile, applications that need strong censorship resistance or a more decentralized protocol may be better suited on ethereum, he said.
Ethereum will soon undergo a massive upgrade known as "Ethereum 2.0," which will culminate in the blockchain pivoting to a proof-of-stake concept, among other technical updates. That could change how it stacks up against solana, Ginns said, but before that upgrade, developers are flocking to what works for them.
"Both from a utilization perspective and an investor awareness perspective we're seeing solana really come into one of the top positions among base layers," Ginns said. "That's likely to remain the case, even as ethereum goes through upgrades."
However he noted that solana is still a fraction of ethereum's network value, and the token is unlikely to unseat the second largest cryptocurrency any time soon.
"We have a saying, 'you never bet against ethereum,'" Ginns said. "It would be surprising to me if you ever hear me completely writing off ethereum. It just has such a vibrant developer community."