In 2024, two cryptocurrencies are at the forefront of the pursuit for supremacy in the crypto landscape: Solana and Sui. Each holds the potential to shape the future of blockchain technology and are capturing the attention of investors and developers alike. While Solana has been dubbed the “Ethereum killer” for a while, Sui has emerged as a new contender, leading to speculation about its potential to surpass Solana. This article offers a comprehensive comparison of these two projects, examining their technologies, funding, tokenomics, and challenges to assess which blockchain may prevail in 2024.
Founders and Funding
Founded in 2017 by Anatoli Yakovenko, a former software engineer at Qualcomm, Solana was initially envisioned as a decentralized alternative to centralized exchanges like NASDAQ. Today, it has evolved into a multifunctional blockchain that facilitates decentralized finance (DeFi) and payment solutions. The Solana Foundation, a non-profit organization based in Switzerland, oversees its development.
Over time, Solana has attracted approximately $25 million through initial coin offerings (ICOs) and subsequently an additional $314 million from venture capital investments. This funding illustrates the strong confidence investors have in the project, despite uncertainties that arose from the FTX collapse in 2022. FTX was among the largest investors in Solana which resulted in a sell-off of Solana tokens post-bankruptcy. Nevertheless, due to acquisitions by other investors, the immediate effect on Solana’s price has been relatively limited.
Sui originates from the technology powerhouse Meta (formerly known as Facebook). Meta attempted to launch its own digital currency system called “Libra” and later “Diem,” but faced significant regulatory challenges. Just before Diem’s failure, the development team split into two factions: one established the Aptos project, while the other worked on Sui. Developed by Miston Labs, an American software firm, Sui has significantly benefited from the insights gained during the Meta project.
Sui has successfully raised nearly $400 million through multiple funding rounds. A key highlight is that Sui was able to repurchase the tokens previously held by FTX following its bankruptcy, which enhances the project’s stability.
Technology and Architecture
Solana’s technology is built on a Proof-of-Stake (PoS) blockchain, augmented by the groundbreaking “Proof-of-History” (PoH) mechanism. This enables timestamping of transactions and allows them to be processed in parallel, considerably boosting the blockchain’s speed. Solana boasts the capability to handle up to 200,000 transactions per second—a rate that surpasses most other blockchains. Additionally, it has a block time of just 400 milliseconds, making it one of the fastest blockchains available.
Sui also utilizes a proof-of-stake blockchain but adopts a distinct approach. It employs the programming language “Move,” originally developed by Meta. Unlike traditional cryptocurrencies that are account-based, Sui emphasizes an object-oriented architecture that introduces novel capabilities unavailable in conventional account-based blockchains. In tests, Sui exhibited the ability to process up to 297,000 transactions per second, with a block time of 390 milliseconds, even swifter than that of Solana.
Tokenomics and Price Performance
The native cryptocurrency of Solana, SOL, has an initial maximum supply of 500 million tokens, with approximately 60% allocated to investors, 20% to the development team, and 20% to the Solana Foundation. Initially, SOL’s inflation rate stood at 8%, but it is projected to decrease to 1.5% over the long term. Early investors in Solana have experienced substantial gains, with the token’s price soaring to 650 times its initial ICO value.
Sui’s native token, SUI, has a maximum supply of 10 billion tokens, with 50% allocated to community reserves. The remaining tokens are distributed among investors, the Miston Labs team, and early supporters. In contrast to Solana, Sui is still in its early developmental stages, meaning many tokens will be unlocked over the upcoming years, which could impact the price once they enter the market.
Adoption and Usage
Solana has established itself as a blockchain designed for the masses. Its user-friendliness and rapid transaction speeds have resulted in millions utilizing Solana-based applications globally. The Phantom wallet, a popular browser extension for Solana, has surpassed 4 million downloads. Moreover, Solana has made significant headway in the DeFi sector, forming partnerships with major institutional players like Visa, with a Total Value Locked (TVL) of around $5 billion.
Solana TVL Chart
Despite being newer, Sui is already displaying notable metrics. The Sui Scan Explorer indicates over 5 million monthly active wallets, showcasing rapid user adoption. However, Sui still trails behind Solana in the DeFi sector, with a TVL of roughly $1 billion.
Sui TVL Chart
Nevertheless, Sui’s user base remains highly engaged, particularly within the blockchain gaming sector.
Comparison
Author
Ed Prinz serves as the Chairman of DLT Austria, the leading non-profit organization in Austria focusing on blockchain technology. DLT Austria is committed to educating and promoting the benefits and applications of distributed ledger technology through educational events, meetups, workshops, and open discussions, in collaboration with prominent industry players.
Disclaimer
This represents my personal viewpoint and should not be taken as financial advice. I cannot guarantee the accuracy of the information contained in this article. If in doubt, please consult a trusted financial advisor. There are no guarantees or promises of profit made in this article. All statements made herein reflect my personal opinion.
