A recent analysis by Ryan Watkins, co-founder of Syncracy Capital, highlights Solana's growing momentum in several key metrics that ethereum once dominated. However, Watkins notes that running Solana nodes is more expensive amid this revelation.
Solana is recovering; Key metrics increase
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This rapid change in Solana metrics is when the network has been in the spotlight among developers and merchants. Over the past few trading months, SOL prices have soared, breaking through immediate resistance levels and recording new highs in 2023.
Rising SOL prices also seem to have rejuvenated on-chain activities, taking into account the number of transaction counts and, for example, the total value locked (TVL). While SOL is more than triple the September 2023 lows, the network's decentralized finance (DeFi) TVL, based on DeFiLlama datais at more than $1 billion, more than triple July 2023 levels of around $270 million.
The preference for Solana lies in its architecture and scalability, which allows the implemented protocols to carry out transactions and launch smart contracts at low cost. Critical to this is how Solana is structured and how its reliance on independent nodes is rewarded for their commitment, allowing for decentralization and security.
Cost of operating nodes, a decentralization comparison emerges
While some have expressed concern about Solana's decentralization, Watkins notes that Solana has about 40% the number of nodes as ethereum. However, the main difference is that Solana nodes are 5 times more expensive to run than ethereum ones. In Watkins' analysis, the network must bear this cost in exchange for the high performance it offers.
Sync data shows that running an ethereum node costs around $550. Meanwhile, running a high-end node running Firedancer costs over $5,100. Still, there is a marked change in performance as the Solana node has a TPS of 55,000 versus 100 on ethereum.
As of December 19, the Nakamoto coefficient stands at 21, unchanged. Meanwhile, according to Nakaflow data, ethereum's is 2. Typically, the higher the reading, the more decentralized the network is. With this, the tracker suggests that Solana is more decentralized than ethereum.
Still, there are more than 1 million ethereum nodes at press time, according to Beacon Scan. At the same time, there are more than 2,900 Solana nodes, according to Solana Compass.
In defending Solana, Watkins also recognizes that decentralization encompasses more than node count and geographic distribution. The co-founder emphasizes the importance of Solana continuing to decentralize its developer ecosystem and implement features such as thin clients to ensure cost-effective end-user verification.
Solana plans to launch the Firedancer validator client to diversify, make the network more robust and improve reliability. In particular, the client will allow nodes to be deployed to produce blocks faster. This will help the mainnet grow as the network can process more on-chain transactions without relying on off-chain and other options.
Featured image from Canva, TradingView chart
