Digital Assets
Is it Possible to Dethrone Ethereum? Top 5 ‘Killer’ Rivals
Ethereum, the pioneer of smart contracts, has been the undisputed king of the cryptocurrency world ever since it was launched in 2015.
Although several blockchains have entered the cryptocurrency space and gained traction since then, Ethereum is still the world's most widely used blockchain platform for the time being. After all, it powers hundreds of decentralized applications (dApps) and has a vast ecosystem of developers and users.
The ground reality is that most dApps are built on the Ethereum network, which holds billions of dollars in assets. Statistically speaking, Ethereum accounts for a whopping 60% share in the DeFi sector alone.
So, now the question is if it is even possible for another to dethrone Ethereum. And in this article, we will address just that. So, let's get started! Shall we?
The King: Ethereum
As stated above, Ethereum has been the top dog in the cryptocurrency world for a few years. Despite this, no other cryptocurrency has been able to dethrone it. But there are a few strong reasons for this:
- Ethereum has a very strong development team and community behind it.
- Ethereum has a very robust and well-tested blockchain.
- Ethereum has a wide range of applications and uses cases.
Despite its advantages, Ethereum is not without its challenges. For instance, the network is often congested, and transaction fees can be significantly higher than some rivals. Moreover, Ethereum is facing stiff competition from other platforms like Avalanche (AVAX) and Polygon (MATIC), which are slowly gaining traction.
Often dubbed the Ethereum Killers because of offering similar features, they also come with their own unique features, particularly in the form of cheap and fast transactions.
If you didn't already know, scalability is Ethereum's weakest point, as it can handle a mere 15-30 transactions per second. This is a particularly concerning matter, as Ethereum is the go-to blockchain for not just users but also developers looking to create new crypto applications, from NFTs to decentralized financial products.
You must be wondering why developers are still opting for Ethereum when they know about its scalability issues. Well, for starters, it has a few key advantages – these include its decentralized platform, a large number of developers, and a large ecosystem of coding and tech products for new developers to adopt.
Yet, there's no denying that Ethereum's scalability issues do leave a gaping hole for a series of newer blockchains offering faster and cheaper transactions. So, who are these Ethereum killers?
The Ethereum Killers
Before we take a closer look at these Ethereum Challengers, let's get the basics out of the way. For the cryptocurrency enthusiast, the concept of an Ethereum Killer is about evolving into a blockchain capable of mitigating early adopters' shortcomings.
Players who can fix this issue will get to capture Ethereum's dominance over the long term. For now, Cardano (ADA), Polkadot (DOT), Avalanche (AVAX), Hedera Hashgraph (HBAR), and Polygon (MATIC) are the five best-known Ethereum Killers. While it might still be a bit too early to crown them as such, each have shown signs of being capable of doing so, particularly in specific usages.
Much like how Ether is struggling with the ongoing market turmoil, AVAX, MATIC, ADA, DOT, and HBAR are also growing through some tough times. All these coins are easily available on major crypto exchanges for trading, buying, selling, storing, and usage.
In terms of prices, Ethereum suffered from a 75% drawdown from its all-time high, whereas its competitors faced a more brutal beating at a 90% loss in value as of writing this article. So, when it comes to the fall in prices, there isn't much difference between them. Hence, we can ignore the price factor for now.
But what can't be ignored is the fact that these Ethereum killers have been slowly extracting market dominance from Ethereum. For instance, Ethereum accounted for more than 97% of all the total value locked (TVL) in the DeFi sector at the beginning of 2021, but by the end of the year, it collapsed to a mere 57%, as per DeFi Llama.
Recently, Cardano also launched the DeFi service, looking to capitalize on some of the momentum generated by its fellow Ethereum competitors. Created by Charles Hoskinson, the Ethereum co-founder, Cardano is among the top 10 cryptocurrencies and is being used by the agriculture sector for better tracking of supply chains as well as the Ethiopian education ministry, which is rolling out a network for tracking educational credentials in a tamper-proof manner.
Avalanche meanwhile touts its compatibility with Ethereum Virtual Machine (EVM), allowing developers to transfer smart contracts from Ethereum. As such, it will enable the launch of applications in one interoperable, scalable ecosystem. Avalanche has been focused on building its infrastructure, advancements in network functionality, integrating with other protocols like THORChain for enhanced user access and experience, and expanding into NFT, GameFi, real-world assets (RWAs), and unique use cases.
One of the most popular alternatives today is Polygon, which allows developers to build and connect Layer-2 infrastructures. It is actually designed to support infrastructure development and help Ethereum scale. The protocol is currently used by more than 50k dApps, including prominent brands like Stripe, Instagram, Adidas, Starbucks, Flipkart, Robinhood, and Nubank, which speaks of Polygon's popularity, technical capabilities, marketing efforts, and growing adoption.
When it comes to Polkadot, which supports various interconnected, application-specific sub-chains, the network continues to have its parachain slot auctions. These auctions are a means to decide which sub-chain will be connected to the main chain. Through these auctions, currently, 10.7% of its native token DOT's total supply (132 million DOT) has been bonded. Polkadot is working on creating powerful cross-chain applications to drive adoption in an increasingly competitive market.
Hedera is another decentralized public network where developers can build secure, fair applications with near real-time consensus. The platform is owned and governed by a council of global innovators, including the likes of Avery Dennison, Boeing, Deutsche Telekom, FIS (WorldPay), Google, IBM, LG Electronics, Nomura, Tata Communications, and University College London (UCL). On Hedera, anyone can create accounts, but only the council members can run mainnet nodes for the stability and reliability of the network. The team touts it as the enterprise-grade blockchain.
While these blockchain networks are some of the prominent Ethereum competitors, they are not the only ones. The world-leading cryptocurrency exchange Binance's Binance Smart Chain (BSC) is also popular in retail crypto trading and is compatible with EVM. Solana is another one giving Ethereum stiff competition, thanks to its claims to handle 65,000 transactions per second, which is 2000 times faster than Ethereum, and 40 times faster than Visa.
Conclusion
Ethereum is simply the leading platform for blockchain development and decentralized applications, which has passed the test of time. With a strong community and a wide range of applications being built on top of it, Ethereum is well-positioned to maintain its dominant platform in the space.
While there are platforms that offer similar functionality, Ethereum has the advantage of being the first and most well-known. This gives it a network effect that is hard to match. Besides, Ethereum is also constantly evolving, with new features and improvements continually being added.
Moreover, recent upgrades like the Merge have made Ethereum more energy efficient and secure. Combined with EIP-1559's fee-burning mechanism, the drop in ETH issuance can essentially make ETH a deflationary asset. On top of this, being a proof-of-stake (PoS) coin means investors can earn passive income on their Ether.
All of this makes it an attractive platform for developers and users alike. So far, Ethereum has been the clear winner in the race to become the leading blockchain platform.
But the competition can't be disregarded. Ethereum killers like Avalanche (AVAX), Polygon (MATIC), Cardano (ADA), Polkadot (DOT), and Hedera Hashgraph (HBAR) are not like Bitcoin Cash (BCH) to Bitcoin (BTC). After all, they have their own growing ecosystems backed by respective strong communities.
Each of these Ethereum killers has a different strategy and is still in its early stages. So far, they've all been able to hold their own and even grow, despite the competition. And just because Ethereum has been around for longer and has more name recognition, that doesn't mean the Ethereum killers can't eventually overtake it. It might only be a matter of time.
As such, it's hard to say who will emerge as the victor. It is very much possible that another better blockchain could dethrone Ethereum in the future. However, Ethereum has a massive lead at the moment, and it will take a lot of effort from so-called “Ethereum Killers” to catch up. Ultimately, the competing blockchains might not even kill Ethereum – they might just lead to the fragmentation of usage between the various blockchains.
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