Posted 2 months ago | by Catoshi Nakamoto

The blockchain industry is filled with a variety of different projects, all competing for the same market share. The communities attached to these projects always think that their project is the best, and they always have a list of reasons for why their favorite will end up on top. This isn’t exactly how it works though, it’s not a zero sum game where the winner takes all, and it’s hard to say which project is the best when they are all taking different approaches and optimizing for different things. It’s like asking whether a dolphin is better than a cheetah, the answer depends on whether the competition is on land or in water. Still, it’s important to know which trade offs are being made with the projects you’re invested in. In this video we’re going to compare some of the top smart contract platforms in the crypto space, and identify some of their main strengths and weaknesses.

Let’s get it.

Welcome to BitBoy crypto…

There is fierce competition in the layer one race, with newer projects like Avalanche and Solana seeing explosive growth over the past year. These projects have positioned themselves as faster, cheaper and better versions of Ethereum, the original smart contract platform. It is true that these projects are faster and cheaper than Ethereum’s layer one, but that doesn’t necessarily mean that they’re better. Don’t get me wrong, these are all ecosystems that we are invested in, but there are more factors than speed and price that we need to consider. You also have to think about layer 2 networks on Ethereum, that are tapping into the security of layer one, while still offering cheap and fast transactions.

A recent post from the account Polynya laid out the prices for the various smart contract platforms, which included Ethereum main net, its most popular layer two networks, and the other layer one platforms competing in the space. Polynya is an account that is focused exclusively on promoting what is happening in Ethereum’s layer 2 ecosystem, so they definitely have a bias, but their research is very informative, and they have included all of their sources.

The most expensive blockchain on the list was Ethereum at an average of 4 dollars and 55 cents per transaction. No surprise there. The competing layer ones are far cheaper, all of them having transaction fees of under a dollar.

Solana was the cheapest layer one network, with an average transaction fee at 0.002 cents, a fraction of a penny. If we were going to rank these blockchains by affordability, Solana would be at the top of the list, but Solana’s high speeds and cheap transaction fees do not come without a cost. There have been multiple occasions now where Solana’s blockchain has gone offline for long stretches of time, and while funds that were locked into cold storage were safe, these outages were responsible for major losses in NFTs and widespread liquidations on Solana DeFi. When a network is down, users are unable to sell their assets and take profits, and they are also unable to increase their collateral to avoid liquidations. These are serious considerations that big money players take into account when deciding where to keep their money, and it’s something that we should be paying attention to as well. I am not here to FUD, Solana is still one of our biggest holdings, but we need to be aware of the pros and cons of each project. This is also a concern with Binance’s BNB coin, which has an average transaction speed of about 37 cents. BNB has an extremely small number of validators, which makes it very centralized, and it has several other technical vulnerabilities that create security risks. BNB is still in our portfolio though, and it will probably do very well with the force of Binance behind it.

Fantom would be next on the list, with an average transaction fee of just 2 cents. Fantom had a huge run up earlier this year in anticipation of a new DeFi ecosystem created by Yearn founder Andre Cronje, but much of the hype has died down since he announced that he was stepping down from DeFi development. Fantom is certainly cheap and there are some great projects being developed there, but the instability on the social layer could be a potential drawback that keeps investors on the sidelines.

Terra is another layer one blockchain that is offering transaction fees under 10 cents, with an average fee of about 9 cents. Terra is a stablecoin network and payment application that is extremely popular in South Korea, where the project was founded. Terra has millions of users in South Korea, which has helped to kickstart its meteoric rise to the top of the crypto charts. Terra’s value comes from its algorithmic stablecoins, which have been extremely resilient despite some volatility during major market corrections. Algorithmic stablecoins are still a very experimental and competitive space though, so the future can be hard to predict.

Next up is the new kid on the block, Avalanche, with an average transaction fee of about 39 cents. Avalanche has not been around very long though, so it is one of the least battle-tested blockchains at the top of coinmarketcap.

Finally we have Cardano at an average of 86 cents per transaction. Still under a dollar, but more than double or even triple the cost of transactions on some of the other layer one networks. Cost isn’t everything though, Cardano has an incredibly robust network with a thriving community of stakers. In fact, Cardano remains one of the most staked crypto assets in the market, keeping an average of over 70% of the supply staked.

Now if we take a look at Ethereum’s layer two ecosystem, transactions get much cheaper than mainnet, sometimes they make security trade offs as well. Not all layer twos are the same on Ethereum, in fact, not all scaling solutions on Ethereum are true layer two networks, some of them are sidechains, and this is an important difference. A true layer 2 network is a rollup that taps into the security of the Ethereum mainnet, Optimism and Aribtrum are the most popular examples of this model. Both of these blockchains have transactions that are under a dollar. However, there are also side chains like Polygon or Ronin that are helping to scale Ethereum, but depending on their own security. Polygon and Ronin both have transaction fees that are a fraction of a cent, but because they aren’t rollups, they are less secure than other layer two networks. It might not be like this forever for Polygon though, over the past year the Polygon team has been developing its own ZK rollup technology, and has promised to eventually become a true layer 2 rollup.

ZK stands for Zero Knowledge Proofs, which are some of the most advanced cryptography in the industry. This technology will offer the scale that is needed for mass adoption, without sacrificing the security that has given crypto its value in the first place. Most experts believe that it will be a few years before ZK technology becomes the standard, but there are a few ZK rollups that are already live. Transactions on ZkSynch are just about ten cents, and it is a rollup, so it taps into the security of Ethereum, while using zero knowledge proofs. There are also app-specific zk rollups, like the one used by the decentralized exchange DyDx. Transactions on DyDx average somewhere around a cent, without needing to make major security trade offs. Blockchains are getting cheaper and faster all the time and that’s a plus not just for Defi, but for the emerging NFT and Metaverses that are being built on them. The cream will rise to the top and if you pick your projects correctly, so will your portfolio.

But that’s all I got. Be Blessed. Bitboy out.

About Catoshi Nakamoto

c6ea0c3794492f30883e516d39b2597a?s=90&d=blank&r=g Top Crypto Smart Contract Coins for 2022 (Faster & Cheaper vs High Security)Activist/Journalist, former writer - We Are Change, The Mind Unleashed, Coinivore, others. Currently writing for - Activist Post and Bitboy Crypto. Not Right or Left Apolitical. I Care About Truths (CATS.) Cryptocurrency enthusiast, I mined and lost 100+ BTC in 2010-2011. I work with - Bitboy, SoMee, CEEK, Presearch, and W3BT aka FMW Media Group. Friend of mostly everyone who isn't a dick. Just A Cool Cat.