(2021-09-10) Solana's Fast Cheap Answer To Ethereum's Gas Wars

Nat Eliason: Solana's Fast & Cheap Answer to Ethereum's Gas Wars - DeFriday #13. When I started writing DeFriday, you could do most Ethereum transactions for under $10-$20.

Unfortunately, since then, the gas fee landscape has changed pretty significantly.

If you wanted to follow the advice in earlier articles, you'd be looking at hundreds if not thousands in total gas fees. Ouch!

Thankfully you don't have to do everything on the Ethereum Mainnet. One option is to use Polygon: a sidechain to Ethereum I wrote about a few months ago.

Another option that's quickly growing is Arbitrum: a Layer 2 solution for Ethereum that recently launched and is quickly releasing more and more applications.

These Layer 2s and sidechains are great because you can bounce back and forth among them fairly quickly, and they offer many of the same applications

But they're not so great because you still have to get to them in the first place, and right now, that means going through the Ethereum mainnet and often paying $200+ in gas just to bridge your funds over.

Thankfully, there's another option. Solana has been all over the news recently with its insane price surge, but what sets Solana apart from other cryptocurrencies that have recently run up like Cardano is that Solana actually has a fully functional DeFi ecosystem.

Solana vs. Ethereum DeFi Ecosystems

As the first blockchain to support smart contracts, and the most widely adopted smart contract blockchain, Ethereum has led the way with most Web3 innovations including DeFi.

DeFi ecosystems have popped up on other blockchains like Binance Smart Chain, Polygon, and Fantom, but since those chains are all compatible with the Ethereum Virtual Machine (EVM).

Solana is different. It’s the first smart contract enabled blockchain with significant adoption that isn't EVM compatible

This obviously creates some barriers to entry. Since it uses an entirely different programming language (Rust instead of Solidity)

That's likely why applications like AAVE have Polygon and (soon) Arbitrum support, but haven't launched on Solana.

there are some cool new kinds of applications on Solana you don't see in the Ethereum ecosystem, and they run as fast and cheap as applications on Polygon.

But before we move on, there is one other big downside here: lack of security history. Everything on Solana is so new and untested that we don't know what kinds of security exploits might be waiting to be discovered.

How to Get Setup in the Solana Ecosystem

When I say Solana has the best blockchain user experience right now, half of the credit goes to Phantom.

It's a browser wallet similar to MetaMask... but a lot nicer

Getting set up for DeFi is as simple as installing Phantom in your browser, then transferring in some SOL tokens from an exchange like Coinbase.

Decentralized Exchanging on Solana

Lending & Borrowing on Solana

Yield Farming on Solana

The Future of Solana and Ethereum

Once there are easier ways to go directly onto Ethereum Layer 2s and Sidechains, some of Solana's competitive advantage will be gone. But if it can amass enough market share before that happens, it might not matter.

Whatever the future holds, this is the first time a non-EVM blockchain is putting up serious competition to the Ethereum ecosystem.