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Solana vs. Ethereum: Who Has the Better UX Around Token Transfers and NFTs?

By Michael @ CryptoEQ | CryptoEQ | 2 Apr 2024


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User Experience

The experience for users of Web3 and DeFi today is complex and high-risk.

To do things such as set up a new account or perform a swap between two tokens, users are confronted with deeply technical requirements that they need to understand and accept, or if not, they could lose their assets.

To assess the user experience offered by our selection of leading platforms, we break this down into broadly five questions: 

  • Tokens and NFTs - are assets predictable, transparent, and secure?
  • Transactions - are transactions predictable, transparent, and secure?
  • Accounts - are accounts easy to set up and secure?
  • Wallets - is the user interface easy to use and intuitive? 
  • Identity and Login - is my Web3 identity private and secure? 

Each of these areas represents a core part of the crypto, Web3, and DeFi experience. 

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Tokens and NFTs

The role of tokens and NFTs in the blockchain ecosystem is undeniable. They are representations of value, be it monetary or symbolic. The simplicity with which a user can understand, trust, and interact with these assets directly impacts the adoption rate of the platform they're hosted on. A complicated and untrustworthy system discourages mainstream users and institutions alike. 

After all, nobody wants to wade through complex smart contract code to ensure the safety of their assets, nor should they have to fear hidden vulnerabilities that malicious entities could exploit. In other words, they can simply be a question: do I know and trust what I am holding?

Ethereum

Ethereum pioneered how assets are represented on decentralized networks by allowing developers to deploy smart contracts with arbitrary logic and hold arbitrary state. No longer were tokens limited just to the primary, native token of the network, such as BTC for Bitcoin, or LTC for Litecoin; but instead, anyone could deploy their own token to the Ethereum network, giving rise to the ICO boom of 2017.

With this logic and state, Ethereum utilizes a model where a token is a smart contract. The smart contract contains a list of balances inside it, and those balances are controlled by logic deployed by that smart contract’s developer.

The Ethereum community has coalesced around a series of smart contract templates, known primarily as ERC (Ethereum Request for Comment) standards, to create some standards and conformance across the tokens created. The most popular standards include: 

ERC-20 - The Standard for Fungible Tokens: This is the most widely used standard for creating fungible tokens on Ethereum. A fungible token is one where each unit is interchangeable and indistinguishable from another unit. Examples include cryptocurrencies like DAI or USDC. ERC-20 defines a set of functions that the token's smart contract must implement, enabling functionalities like balance inquiries, token transfers, and getting the total supply of tokens.

ERC-721- Non-Fungible Tokens (NFTs): Unlike ERC-20 tokens, which are interchangeable, ERC-721 tokens are unique. Each token has distinct information or attributes, making them distinguishable. This property is ideal for digital collectibles, art, or any digital asset where individuality and provenance are crucial. The standard ensures that each token has a unique identifier, allowing for the transfer and inquiry of individual tokens.

ERC-1155 - Multi-Token Standard: An evolution in Ethereum's token standards, ERC-1155 allows a smart contract to produce fungible and non-fungible tokens. It is optimized for scenarios where users may need to batch multiple items, reducing the gas costs associated with deploying and managing multiple token types.

Since tokens on Ethereum are governed by smart contract code, they are transparent by nature. Anyone is able to read the code to understand how the token behaves. However, this requires someone to actually be able to read and understand that code in order to ascertain whether the token is in fact secure. This is a severe limiter in establishing a user-friendly UX.

Furthermore, this approach to representing tokens has given rise to a multitude of user experience issues, such as:

  • Requiring users to provide “spend approval”, which is kind of like giving a third-party fintech access to spend the money in your bank account for it to provide you services.

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An example spend approval

  • Users need to be wary not to interact with a “malicious” token that could potentially drain the user’s account if a transaction is signed interacting with that account.
  • Users are not actually custodying their tokens in their account, as their account is just a record inside a third-party developer’s smart contract. 
  • Wallets do not immediately know all the tokens in a user’s account, requiring users to manually “import” the less common tokens to wallets like MetaMask.

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Manually importing a token

Of course, it is worth stating that as the emphasis and adoption of L2 platforms continue to expand (Optimism, Arbitrum, etc.), Ethereum will continue to trend towards a base settlement/security layer, meaning that it is far less likely to need a comprehensive UX. However, these UX challenges are presented by the capabilities of the EVM itself. Therefore, any L2 that utilizes the EVM will also face these same UX issues.

Solana 

While most blockchain platforms use the term "smart contract," Solana prefers the term "program." Similarly, instead of the commonly used "token standard," Solana introduces the concept of a "token program." These programs are primarily written in Rust and are housed in the Solana Program Library (SPL). SPL serves as a repository of on-chain programs curated by Solana's core team. Tokens minted on this platform are often referred to as SPL tokens.

The SPL standard allows for the creation of fungible tokens on the Solana blockchain, allowing developers and projects to create new assets using the standard easily. This is expanded to NFTs through the Metaplex protocol. Metaplex allows the creation of unique, non-fungible tokens. Solana's ecosystem has several wallets that support SPL tokens and Metaplex NFTs. The Phantom wallet, for instance, offers a smooth user experience and integrates both SPL tokens and NFTs seamlessly. 

A notable feature of Solana's system is the unified Token Program that facilitates the minting, transferring, and burning of both fungible assets and NFTs. This means that for every new asset, there's no need to deploy a separate smart contract. Instead, an original "mint authority" address is designated, which acts similarly to a smart contract address in the Ethereum ecosystem.

Solana’s Token Program improves upon Ethereum’s ERC approach because the SPL is on-chain and there is less likelihood for a developer to make a mistake instantiating a token from the SPL, as opposed to Ethereum’s manual approach. But while the SPL provides a base layer of security, the implementation specifics can introduce vulnerabilities. Thus, users have to be cautious and, in many cases, place trust in developers and their code.

Other user experience issues still manifest due to Solana and Ethereum sharing a similar smart contract account-based model to asset representation. Issues like wallet drains, needing to read the underlying code to truly understand how a token behaves, and the need to manually import tokens into your wallet still persist.

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Michael @ CryptoEQ
Michael @ CryptoEQ

I am a Co-Founder and Lead Analyst at CryptoEQ. Gain the market insights you need to grow your cryptocurrency portfolio. Our team's supportive and interactive approach helps you refine your crypto investing and trading strategies.


CryptoEQ
CryptoEQ

Gain the market insights you need to grow your cryptocurrency portfolio. Our team's supportive and interactive approach helps you refine your crypto investing and trading strategies.

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