Solana And Terra Could Be The Next Big Advancements For Defi And Dapps

Programmable blockchains, such as Ethereum, allow developers to build programs that run on their own. As a result of its launch, that technology has morphed into decentralized applications (dApps) and decentralized finance (DeFi) platforms, software that resides on peer-to-peer networks rather than corporate servers.

With dApps, users’ privacy is protected, and DeFi products increase the efficiency and accessibility of financial services. The growth of both industries should not be surprising, given that both offer similar value propositions. DeFi products have received $230 billion in investment, and it is estimated that over 3,800 dApps are in existence. However, Ethereum is the dominant platform in both instances.

Ethereum-built products have, however, been challenged by scalability issues, which have driven transaction fees 250% higher in the past year. Even though Ethereum 2.0 will address that issue, other programmable blockchains like Solana and Terra are gaining ground. In addition, Terra and Solana are valued at $43 billion and $23 billion, respectively, a fraction of Ethereum’s $369 billion.

To Summarize:

• Despite being the first programmable blockchain, Ethereum’s adoption has been slowed by high transaction fees.
• The Ethereum ecosystem is the most popular platform for developing dApps and decentralized applications, but other platforms are gaining in popularity.
• Both Terra and Solana may eventually reach similar levels of success.
• dApp developers and DeFi investors have become fans of Solana. Solana is currently working on over 1,100 projects and has $9.8 billion invested on its blockchain, ranking it as the fifth-largest DeFi ecosystem. Solana will likely see a bump in usage in the years ahead, a trend that will increase demand for the token, pushing its price higher. This is likely to happen if dApps and DeFi continue to gain traction — a very likely outcome, given the value proposition.
• The Terra platform is built on top of the Cosmos Hub, powered by the Tendermint consensus protocol, which is designed to be fast and interoperable. Terra can theoretically handle 10,000 transactions per second and finalizes them in just six seconds. As a result, it possesses much higher scalability than Ethereum.
• With more dApps and DeFi products on Terra, Terra stablecoin demand will increase. As a result, because LUNA is designed to absorb stablecoin price volatility, its price will rise as demand rises.

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