Polkadot vs Cardano vs Solana: Which Third-Generation Blockchain Should You Choose?

Bitcoin, as a first-gen blockchain, burst onto the traditional finance scene and changed the way finances are controlled and who controls them. The second-generation blockchain — Ethereum — introduced two major innovations: smart contracts and the ability to use this blockchain to create new dApps and cryptocurrencies.

Now the moment has arrived for third-generation blockchains such as Polkadot, Solana, and Cardano. They are ready to compete with the G.O.A.T.s such as Ethereum and Bitcoin by providing solutions to scalability and interoperability issues, as well as opening up new opportunities for blockchain’s mass adoption.

Read on to learn more about the advantages and disadvantages of Polkadot, Solana, and Cardano and find out about their differences in terms of consensus mechanisms, scalability, decentralization levels, and number of projects.

Solana vs Cardano vs Polkadot: what are their pros and cons?

To better understand what makes the Solana, Cardano and Polkadot blockchains different, we need to know how they function as well as their advantages and disadvantages. Without any further ado, let’s dive straight into them.

Pros and cons of Solana

Solana’s first block was created in March 2020. Since then, the blockchain’s popularity has gathered pace, but this has come with both ups and downs. Here is what this blockchain is known for, and also its disadvantages:

✅ Low transaction costs and fast transaction speed

Solana’s average transaction fee is only $0.00025, while the transaction speed can reach up to 50,000 tps.

✅ Fast-growing ecosystem

As of November 9, 2022, there are more than 700 projects in the Solana ecosystem, 396 of which are NFT-related and 155 are DeFi projects. For comparison, a year ago there were only half this number.

✅ Relatively low environmental impact

According to the report published by Crypto Carbon Ratings Institute in January 2022, the Solana blockchain consumes 1,967 MWh of electricity a year. This is a high figure compared to Cardano (598 MWh) and Polkadot (70 MWh), but it is much lower than Bitcoin (100.35 TWh).

In addition, Solana is also more eco-friendly than Ethereum, even after the Merge. Before September, 2022, this blockchain consumed 23 TWh, and now this number has dropped to 2,600 MWh per year. However, this figure is still a little higher than Solana’s.

❌ Network instability

Solana’s multiple outages are probably the biggest problem with this blockchain. In 2022 alone, Solana experienced ten partial or complete network failures. One of the recent outages occurred on October 1, 2022. The blockchain stopped processing transactions for about 6.5 hours.

At the same time, Solana co-founder Anatoly Yakovenko believes that this issue will be resolved very soon. He thinks that Firedancer, Solana’s client, will be a “long-term fix” because it will have its own software development team — a firm called Jump Crypto.

“Because it’s a separate team, the probability of them having the same bugs in their code as ours becomes virtually zero,” Yakovenko added.

❌ Disputes around decentralization

Solana claims to be fully decentralized and censorship resistant. However, some concerns remain. The network currently has 1,774 validators on mainnet, with 30 of them forming a superminority. The superminority represents the smallest number of validators that control 33% of the total stake.

It’s very likely that this will never happen, but theoretically there is still a possibility that these 30 validators might conspire to stop the network.

Pros and cons of Cardano

Cardano was founded in 2015 by Charles Hoskinson, who was also a co-founder of Ethereum. The platform was launched two years later and positioned itself as an alternative to its bigger brother Ethereum.

Let’s take a closer look at what benefits Cardano has to offer and what it still lacks.

✅ Relatively fast and cheap transactions

Currently, the Cardano network processes about 250 tps, while being able to scale up to 1,000 tps. As for fees, one transaction costs around 0.17 ADA, which is less than 50 cents.

✅ Low environmental impact

The aforementioned Crypto Carbon Ratings Institute report states that the Cardano network consumes 598 MWh of electricity annually. This is a much lower rate than that of Solana and Ethereum.

✅ Multi-layer structure

Cardano consists of Cardano Settlement Layer (CSL), specifically built to power the digital currency economy, and the Cardano Computation Layer (CCL) — the place where developers create and deploy smart contracts and dApps.

Such a structure provides high scalability and allows protocol updates to be implemented without interfering with transactions.

❌ Still in development

Cardano has been under development since 2015. Although the process never stops, it is still quite slow compared to other blockchains that are developed and updated faster.

❌ Difficult to catch up with competitors

This problem arises from the fact that Cardano is still being developed. Other blockchains, like Solana or even Ethereum, have large software development teams that implement improvements much faster. This is simply the reality of the tech world.

Pros and cons of Polkadot

Polkadot’s first block was created two months after Solana’s — in May 2020. This blockchain, although it would be more correct to label it a protocol or a multi-chain application environment, stands out for its cross-chain interoperability. This is achieved through parachains — independent blockchains that can be customized for different use cases.

Let’s look more closely at its particular characteristics, as well as the benefits and drawbacks.

✅ High scalability and interoperability

Developers can create and launch their own tokens on top of their newly-developed blockchain platform. More importantly, Polkadot allows the user to transfer not only tokens, but any type of data or assets across blockchains. In this way, by connecting to Polkadot, platform creators get the opportunity to interact with a wide range of blockchains in the Polkadot network.

Regarding scalability, Polkadot’s current network speed is 1,000 tps. In September 2022, it was announced that a method called “asynchronous backing” would be deployed to the Polkadot’s Kusama development-testing network. It is expected that after this the transaction speed will be able to reach 100,000 and 1,000,000 tps.

✅ No need for forks

Hard forks are the type of fork that can spell trouble, as they make the chain split and as a result present security issues. Polkadot, for its part, manages its updates, bug fixes, and integration of new features without any need for hard forks.

✅ Very low environmental impact

Out of the three blockchains, Polkadot is the most environmentally friendly: it only consumes 70 MWh of energy per year.

❌ Limited number of parachains

The Polkadot network assigns parachain slots to various blockchain projects by selling them at auction, but at the moment it is estimated that Polkadot will only be able to handle up to around 100 parachains. This is a very limited number, and some projects may not be able to use this technology when they need it.

❌ Fierce competition with other blockchains

As blockchain technology develops and improves, the competition is also drastically increasing. To date, Ethereum, Cardano, and Solana are strong rivals for Polkadot, and with upcoming updates and fixes they will be able to offer even greater security, scalability, and interoperability than Polkadot currently has.

Polkadot is commonly referred to as Ethereum’s competitor. But can it outmatch Ethereum? Find the answer in the Ethereum 2.0 vs Polkadot: Ultimate comparison video, where our business analyst discusses both blockchains in detail.

Polkadot vs Cardano vs Solana: how to choose one?

When choosing from these third-generation blockchains, you will need to take into account several factors, in particular their consensus models, scalability, levels of decentralization, and the size of their ecosystems. We will take a look at each of them in turn.

Consensus

All three blockchains use consensus models based on the Proof of Stake (PoS) concept. Solana, for example, combines Proof of Stake and its own unique algorithm called Proof of History (PoH).

PoS selects validators randomly, but it does pick users with larger stakes in crypto. PoH, for its part, is a synchronization algorithm that solves the issues related to the validity of timestamps in a decentralized network.

It was the successful combination of the two algorithms that enabled Solana to achieve such high scalability and impressive transaction speeds.

Cardano uses its own Ouroboros consensus algorithm, which is a version of the PoS model. The protocol divides time into epochs. One epoch = a certain number of slots, and one slot = one second. At present, one epoch includes 432,000 slots.

One epoch usually implies around 21,600 slot leader nominations. The concept is a very familiar one: those with bigger amounts of staked crypto will have a greater chance of being elected as slot leaders and, in the end, of being able to validate transactions and receive rewards in ADA.

Cardano’s consensus protocol is environmentally friendly, efficient and secure. However, the transaction speed is slower than Solana’s.

Polkadot leverages a variant of PoS called Nominated Proof of Stake (NPoS) consensus. By applying this algorithm, Polkadot ensures the network’s fairness and security.

This consensus algorithm involves two roles: validators and nominators. Users of both roles lock their tokens as collateral and are rewarded in accordance with their contribution.

However, if a validator or nominator engages in careless or troublesome behavior, they may lose their staked funds. Nominators need to ensure that only the most trustworthy validators are elected. Hence they have a financial incentive to keep a close eye on the validators and network performance.

Scalability

When it comes to scalability and transaction speed, Solana is the undisputed leader here (so far). It has the ability to reach up to 50,000 tps. Cardano, meanwhile, processes about 250 tps. The Polkadot network’s speed is 1,000 tps.

While both Cardano and Polkadot have plans to reach 1,000,000 transactions per second in the future, they have yet to match Solana’s standard.

Decentralization

Solana is more centralized than competitors like Ethereum, Cardano, and Polkadot: just 30 top validators control 33% of the total stake.

Cardano is reckoned to be a decentralized blockchain because it’s the community that controls all block production. It achieved this level of decentralization in 2021.

Polkadot started on its road to decentralization back in 2020 after the community governance decided to remove the special admin rights that the Web3 Foundation previously enjoyed.

Projects

Today, out of the trio of Solana vs Cardano vs Polkadot, Cardano is the blockchain with the largest number of projects built on its basis. According to IOHK, the blockchain research and engineering company behind Cardano, as of November 4, 2022 there are 1,130 projects currently building on top of Cardano, with 104 launched.

The Solana ecosystem includes more than 700 projects, and more than a half of them are NFT-related.

As for Polkadot, there are 564 projects running on this blockchain. NFT, DeFi, and Web3 solutions are among the most popular use cases.

Solana vs Polkadot vs Cardano: the verdict

Solana, Polkadot, and Cardano each have a similar consensus mechanism, but they differ greatly in terms of transaction speed and levels of decentralization.

If your project is intended to be completely decentralized and you don’t need to process tens of thousands of transactions, then Cardano and Polkadot are good choices. However, in the battle between Cardano vs Polkadot, the latter proves to be slightly stronger because it offers interoperability between blockchains and faster transactions.

At the same time, Cardano is a very stable and secure blockchain that is also waiting for major upgrades. When Cardano’s Hydra, a layer 2 scalability solution, is released, it is expected that this blockchain’s speed will receive a notable boost.

If you happen to need a great development environment and super fast transactions, then Solana is the best option for you. It already has a large ecosystem of projects and it’s suitable for a variety of use cases. Although it does experience outages, the team behind Solana maintains that these problems will soon be resolved.

Closing thoughts

We have analyzed only three third-generation blockchains. There are in fact already hundreds of them. These tech world youngsters are powerful, unique, and progressive, and it’s really easy to find yourself lost amidst the sheer variety of promising projects.

The good news is that here at PixelPlex we have been working on blockchain-powered apps for almost a decade. This means we can not only help you decide which blockchain platform is best for your specific case, but also build your solution from scratch.

Reach out to our blockchain development team for more information and get your project started right now!