While new price highs are positive for investors, they do present a range of challenges relating to fees, transaction speeds and the centralization of what is meant to be a decentralized ecosystem. Since mid-2020 institutional investors have been steadily flooding into cryptocurrency and this is exacerbating the issue of scalability, high transaction costs and lengthy confirmation times on the Bitcoin and Ethereum blockchain.
Eth2 is steadily rolling out, but it could still be some time before users will benefit from its host of new features. This leaves the door open for other viable candidates to fill the void and a handful of layer 2 projects are gaining traction in the decentralized finance space.
One such project that has been making waves in the past 6 months is Solana (SOL). Founded by Anatoly Yakovenko and designed a team of former engineers from globally recognized companies including Intel, Dropbox, and Qualcomm, Solana claims to be a censorship-resistant blockchain that provides the open infrastructure required for global adoption.
Some experts view the project as a possible Ethereum competitor and FTX exchange co-founder and CEO Sam Bankman-Fried threw his support behind the project when he chose it to host his DeFi project called Serum.
According to Bankman-Fried, Ethereum is incapable of handling the rapid growth seen in the decentralized finance sector and the only way around the scalability and transaction fee challenges is to build on other networks like Solana.
Bankman-Fried claims to have thoroughly tested more than 30 of the top blockchain projects, including Ethereum, before settling on Solana and in the past he referenced the network’s ability to process 50,000 transactions per second.
When asked about scaling improvements with Eth2, Bankman-Fried suggested that it is still insufficient, saying the crypto sector needs something that is “not just 100 times faster than Ethereum, we need, like, a million times faster than Ethereum.”