Learn the key differences between two of the most popular blockchain platforms, how they’ll onboard web3 projects, and price prediction for the next bull run.
Updated Jul 17, 2023
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The FTX fiasco has shattered investor confidence. The crypto market lost one-third of its capitalization in a year after hitting an all-time high of over $3 trillion. However, web3’s momentum wasn’t lost and institutions are still exploring the blockchain space.
For example, big brands like Lacoste, Nike, Adidas, Starbucks, and Meta have continued partnering up with blockchain-based startups to extract value from the ecosystem. This shows signs of confidence from the web2 brands that are now looking for bridges to the decentralized space.
Renewed confidence in DeFi is a crucial driving factor of the next bull run. The masses are slowly gravitating toward decentralized financial systems, but scalability and user experience (UX) are huge roadblocks to web3 adoption.
Projects like Solana and Polygon are already working on creating a scalable ecosystem for DeFi startups. There’s a lot of talk surrounding these blockchain platforms, how they stack up, and whether they’ll be able to onboard migrants from web2.
The scalability of Solana and Polygon has not only garnered the attention of blockchain app developers, but also retail investors. The tokens for both blockchain platforms have shown substantial growth in the past year and have squeezed their way into the top 15 coins ranked by market cap.
To understand the true potential of these blockchain platforms and how investors can get more bang for their buck, let’s explore how both of these decentralized blockchain platforms work.
Polygon, formerly known as the Matic network, is a scalable blockchain platform that uses the Ethereum virtual machine. The popular blockchain platform handles developers' needs by providing them with tools to develop scalable decentralized applications with better performance and UX.
The blockchain platform’s speed and reliability have helped it grow substantially in the gaming space. Games like Aavegotch and Zed Run are increasingly popular apps running on the Polygon network.
Polygon is capable of handling 65,000 client transactions per second, which allows users to make faster transactions than on Ethereum and even with Visa or Mastercard. These lightening fast transition speeds are an opportunity to develop innovative blockchain applications.
The only threat to Polygon’s blockchain network is Ethereum itself. A scaled Ethereum blockchain wouldn’t require L2 solutions to assist with throughput, which might cause Polygon and other blockchain platforms like Avalanche to be irrelevant.
Polygon’s native token MATIC was launched in 2019. The token that was launched at $0.00263 went on to hit its all-time high of $2.8 during the bull run in December 2021.
In 3 years, MATIC has grown to become one of the top 10 largest cryptocurrencies with a market cap of
. The currency has continued its exponential growth, surging 73% since the start of 2023.
This growth comes after Polygon Technologies closed a series of partnerships that brought positive momentum to the token. According to Polygon Studios CEO Ryan Wyatt, Polygon built a great funnel for partnerships.
The price of MATIC has been propelled by other notable partnerships with brands like Adobe, Starbucks, Adidas, Prada, Meta, Reddit, and Stripe.
This positive momentum places MATIC above crypto market trends. An AI technical analysis that uses past price, market cap, and trading volumes as parameters predicts the average price of MATIC to be around $3.50 by 2025. This prediction might even be conservative given all the partnerships and potential for onboarding new applications to the blockchain platform.
Unlike Polygon, Solana is a Layer-1 (L1) blockchain platform like Bitcoin and Ethereum. Solana is one of the few L1 chains to use blockchain technology to handle high transaction volumes without having to implement layer 2 technology.
This means that a Solana blockchain allows blockchain developers to build applications that are scalable and swift—but it isn’t without technical issues.
Solana's competitive edge comes from its capability, speeds, energy efficiency, and the use cases that are unlocked as a result of its functionality. Solana network is capable of handling upwards of 50,000 transactions per second, making it one of the fastest blockchains.
Solana blockchain gained a lot of traction in the NFT sphere in 2022 when users got frustrated by Ethereum gas prices and began seeking alternatives. NFT projects like DeGods and Okay Bears rose amid the “Solana Summer,” and their numbers vouch for the blockchain’s success in the NFT space. However, this hype died down due to the FTX debacle and Solana network crashes, prompting some projects to move to other chains.
The native token of Solana (SOL) was launched in a sale that ended in March 2020 at a price of $0.22. The token gained a lot of traction and went on to hit its all-time high of $259 in November 2021. The momentum gained during the Solana NFT boom was soon lost, and the token went on to see a low of around $8 amid the crypto market crash.
SOL price took a nose dive following the FTX collapse. The network’s inability to stay up 24/7 became less of an issue thanks to a decline in users, but the price of SOL has suffered. For instance, Solana’s technical flaws caused the network to suffer a 20-hour outage on February 27, 2023.
However, the token has successfully made recoveries from rock bottom and is now worth
. If the network architecture is fixed to address outages and other bugs, the Solana ecosystem has a lot of potential, which has made analysts bullish on SOL.
It’s predicted that SOL will regain the $200 mark by 2025, but some analysts also have placed the token at a hefty $480 in the same timeframe, which would mean over 20x growth in just two years.
Polygon and Solana have made waves in the NFT space after investors saw congestion issues on Ethereum. While each blockchain network is working to create a better NFT ecosystem, there are a few key differences that set them apart.
Polygon | Solana |
|---|---|
Ethereum sidechain compatible with other blockchains | Walled garden that’s incompatible with Ethereum and other blockchains |
Negligible gas fees ($0.01 to $0.25) | Negligible gas fees ($0.00025) |
65,000 TPS | 50,000 TPS |
While both blockchains are technically capable of handling NFT minting with high-speed transactions, Solana’s network outages have pushed a lot of startups and projects to migrate to Polygon.
Solana was the strongest contender for the best NFT blockchain network last summer, but technical issues must be resolved before the next bull run for SOL to maintain its dominance.
Staking is a way you can make money on crypto by simply locking it up—think of it as a web3 certificate of deposit. Staked cryptocurrencies earn interest over time, so you earn APY rewards for holding the coin. Staking is what helps secure proof-of-stake (PoS) blockchains, and stakers earn more crypto for contributing.
Stakers use their tokens to delegate a validator responsible for verifying transactions. This is like voting for a certain party you trust to take care of security. The parties are the validator nodes, the votes are the tokens staked, and the security is the transaction validation of a PoS blockchain system.
Solana and Polygon both use the PoS consensus mechanism and encourage investors to stake their tokens in exchange for rewards.
Although the staking rewards vary based on mathematical algorithms involving validator fees, inflation rates, and staked supply, the average staking rewards for Polygon and Solana are estimated to be 5.67% and 5.91%, respectively.
The only risks associated with staking are the vesting times. There’s a set lockup period where the tokens can’t be transferred or accessed for a given amount of time. And when you want to withdraw, there’s often an unbinding period that could last days or weeks depending on the blockchain.
Lockup periods can be a disadvantage in a bear market where the value of the token is dropping more than the yield you’re earning. However, long-term holders benefit the most from staking.
Slashing is another risk associated with staking, but it’s rare. Validators are incentivized not to cheat or exploit the system because if they do, then their associated stake is deducted from their balance. This could lead to investors losing their funds.
To avoid this, token holders are usually advised to diversify their delegation and to only use reputable validators.
With around a million active bitcoin addresses, the crypto space has slowly and steadily increased adoption, making its rise inevitable. It’s only a matter of time before investor confidence is restored, a strong regulatory regime is erected, and the crypto renaissance returns in full force.
Digital assets have been in a bear run for over a year now where most currencies, including BTC, have lost around 70% of their value. While many investors liquidate their portfolios and move to other markets, crypto maximalists are gearing up for the next bull run. Being a smaller market, the investments are riskier by proportionally more rewarding.
The bear market has given investors another chance to place their bets. After months of fear and uncertainty, investor confidence has begun its return. The Fear and Greed index moved to neutral after a year of fear during the bear market. According to some experts, the downtrend will finally come to a halt sometime in 2023.
The market is running sideways after the long bear, making it an ideal time to invest while assets are undervalued. In November 2022, Bitcoin hit a short-term bottom at $15,500. This indicates that we’re already in a bullish cycle, considering how market sentiment has shifted positively and new partnerships are forming in the space.
It’s expected that blockchain networks that support DeFi will trigger mass adoption of crypto. With web3 growing at a rapid pace, improving scalability and transaction speed will play an important role in opening doors for new users to enter the crypto space. Devs are encouraged to explore use cases of decentralized applications that can compete with centralized finance and improve on them.
Solana blockchain and Polygon network will play an essential role in making this happen. Having the potential to onboard thousands of new users and projects, the native tokens of these blockchain networks have a high potential for growth in the coming years.