Avalanche and Solana are emerging players in the DeFi landscape which can both boast high performance, scalability and affordability, as well as two vast ecosystems with several dApps. In this article we’ll find out what differentiates these open-source blockchains based on Proof-of-Stake (PoS), aside from their respective founders’ stories, Sirer and Yakovenko.
Avalanche & Solana: scalability solutions
Scalable or not scalable, that is the trilemma. DeFi‘s Hamletic drama has the technology evolving in an attempt to fully preserve three characteristics – decentralisation, security and scalability. Defining a functional blockchain within this triangle is a real geometric conundrum, but Avalanche and Solana seem to have found the key: the consensus mechanism.
Both feature variants of the Proof-of-Stake: Tower BFT (Solana) and Snowball (Avalanche). In both cases, the authority to validate transactions is conferred by the staking, i.e. freezing funds. Although the basic algorithm is the same, Solana and Avalanche reach consensus using different mechanisms, which we are going to look at in detail.
Consensus Mechanisms: Tower BFT vs Snowball
Solana’s consensus mechanism
Tower BFT integrates the Proof-of-History (PoH) time-based protocol with a classic consensus mechanism, the Practical Byzantine Fault Tolerance (pBFT). PoH adds scalability, decentralisation and additional speed to the native pBFT features (speed, efficiency and fast delivery).
We have already explained the PoH in our articles dedicated to Solana and its creator, Anatoly Yakovenko. In a nutshell, it consists in creating a unique time reference for the blockchain with a sort of ‘cryptographic clock‘. This speeds up the process of validating transactions.
Practical Byzantine Fault Tolerance (pBFT)
he Practical Byzantine Fault Tolerance is a consensus mechanism introduced in the late 1990s by Barbara Liskov and Miguel Castro. It protects distributed networks by collectivising decisions, thus reducing the leverage of fraudulent nodes. The pBFT can only work if the maximum number of defrauding nodes does not exceed ⅓ of all nodes in the system.
Avalanche’s consensus mechanism
Snowball, on the other hand, is Avalanche’s original protocol devised by Emin Gun Sirer and Team Rocket. It follows the Proof-of-Stake basic principles, but represents a new generation of consensus mechanisms. In addition to the robustness, scalability and decentralisation of the classic Proof-of-Work, Snowball adds the element of speed.
Snowball’s peculiarity is that the consensus is based on the Gossip process. In short, each validation node randomly selects other nodes to observe their choices and update its own accordingly. This process of comparison is carried out by each node at the same time, and is repeated for several rounds so that every time different sub-groups get selected.
The validation is completed when all the nodes have updated through the Gossip process.
Staking is greener on the other side
Is the staking in Solana and Avalanche equally accessible? The amount of tokens to block, together with hardware and software requirements, can all constitute significant barriers to become a validator.
Avalanche requires 2000 AVAX to create a validation node, which is a considerable amount. On the other hand, however, it is possible to delegate the stake. The delegator will be rewarded in proportion to the funds entrusted to the validator appointed as delegate, while the delegate keeps a small portion of the reward as a fee. This option is similar to the Delegated Proof-of-Stake (DPoS) and is accessible to people who don’t have the resources to open a validator node. However, there is a minimum amount to delegate the stake as well, which is 25 AVAX.
Solana, on the contrary, does not impose any conditions on the staking. In fact, a mere fraction of SOL is enough to become a validator, provided your hardware meets certain essential requirements. RAM, CPU, memory and connectivity features, on the other hand, are easier for Avalanche to satisfy – even a modest computer can suffice. However, Solana also allows tokens to be delegated and without a minimum amount.
Lastly, according to a report released in January 2022 by an independent body, Avalanche consumes 489,311 kWh in a year, compared to 1,967,930 kWh for Solana. Therefore, the energy used by AVAX equals the average annual consumption of 46 American homes – a quarter of the amount used by SOL.
In conclusion, Avalanche currently has low energy consumption on its side – although its rival is not overly expensive either – while Solana has made its modest staking cost its strong point.
Solana vs Avalanche: Decentralisation
Decentralisation is possibly the ‘soul’ of the blockchain. In the context of finance, in fact, decentralisation aims to counteract the centralisation of power with an anti-censorship peer-to-peer system. There are several aspects to consider when measuring this quality. For example, how much influence the community has on governance, so whether there is a DAO leading the project, or just the development team.
You might think that since validators are accountable for the security of a network, a good estimate of decentralisation might be also the number of nodes with stake – number currently higher on Solana than on Avalanche. This might lead you to think that Solana’s blockchain is more decentralised – wrong!
The most correct way to measure the decentralisation of a network (not a project) is actually through another familiar factor, the Nakamoto Coefficient (NC). The NC equals the smallest number of validators (the ‘superminority‘) whose stakes added together amount to about 33% of all the staked AVAX/SOLs. The higher the number of nodes that hold 33% of the total stake, the more decentralised the network will be. While Solana has a superminority of 19 nodes and Avalanche 27, AVAX is currently more decentralised.
TPS: Solana & Avalanche’s speed
To assess the performance of a blockchain, it’s equally important to measure its speed and scalability. We use 2 metrics for this purpose, the TPS and the finality. The TPS is the number of transactions per second. The finality is the time we have to wait before receiving SOL or AVAX on the blockchain.
In theory, Solana can support 65,000 TPS with a finality of 500ms. However, in reality, it has suffered several service interruptions, the latest of which was due to network congestion. In fact, Anatoly shared a graph on Twitter showing 2.05 million duplicate transactions submitted simultaneously on the blockchain (his comment being, “LOL”).
AVAX and SOL’s actual finality has been estimated to be an average of 2 seconds and more than 20 seconds respectively.
According to its official website, Avalanche supports 4,500 TPS, but its future complete version could potentially reach 20,000 TPS, without sharding or layer-2 technologies.
Did you know that SOL’s smallest fraction (0.000000001) is named lamport in honor of Leslie Lamport, ‘Solana’s biggest technical influence’? Avalanche’s minimum amount, on the other hand, is a nanoAVAX (nAVAX), which equals 0,000000001 (10^-9) AVAX.
Comparing ecosystems – Seaside or Mountains?
Avalanche and Solana’s actual names are curiously evocative of opposite environments: steep mountain landscapes on one side, florid (or rather, Californian) marine wildlife on the other.
We have already looked at AVAX and SOL’s ecosystems in our articles, here’s a quick comparison recap.
Both blockchains can develop Dapps, but there’s a substantial difference in the number of projects. In fact, if you have a look at Avalanche here and Solana here, you’ll notice that Solana has many more projects. However, this doesn’t tell us anything on their actual usefulness. For example, the second most popular blockchain project, Cry-Coin – a meme-token celebrating the famous sad cat – and Salad Cat coin, linked to the meme, have both been created on Solana. Who said cats don’t like water?
Both ecosystems can boast a wide range of DeFi and other technologies, such as, Automated Market Makers (AMMs), centralised (CEX) and decentralised (DEX) Exchanges, Blockchain Explorers to track transactions and identify nodes, Stablecoins, Play-to-Earn and other Gaming applications, NFTs, Oracles, Wallets and other fund custody and management tools, and Bridges to facilitate transfers between different blockchains (Avalanche Bridge and Wormhole).
In addition, both Avalanche and Solana support smart contracts. Avalanche has adopted a sub-chain strategy to ease the transaction processing considerably, the C-chain, which can execute smart contracts, as well as Dapp, NFT and utility token contracts. On the other side, Solana brings everything together in one single blockchain, without sacrificing speed and scalability.
The Total Value Locked (TVL) is another metric frequently used to compare the two ecosystems. You can check it out on Defi Llama.
Avalanche Rush has enabled Aave and Curve to migrate on the AVAX blockchain very successfully. As a matter of fact, together with Trader Joe DEX, they rank in the first 3 Avalanche TVL places. On the other hand, the top winners for Solana are the Serum decentralised Exchange, the Quarry liquidity mining protocol, and, lastly, the AMM Raydium order book. A bit lower but still noteworthy, we have Solend, a lending protocol, and Tulip, a Yield Farming aggregator.
And you, what do you prefer – Solana or Avalanche?