Is Solana (SOL) A Better Investment Than Polygon (MATIC)?

By Bfab | Good vibes | 24 Oct 2022

Solana (SOL) has been one of the most controversial projects in Crypto. With the recent launch of Aptos (APT), it is coming back on front of the scene, since Aptos claims to offer better performance than Solana. However, Aptos ecosystem still needs to be built, and the promised performance is not reached yet. Therefore, Solana and Polygon are still the main low-cost and fast blockchains which can currently be used for NFTs and gaming.

How do they compare?

A major difference is that Polygon is a sidechain of Ethereum, which is EVM (Ethereum Virtual Machine) compatible, whereas Solana is a non-EVM chain. Regarding the decentralization level, although Solana is often criticized, it offers a Nakamoto coefficient of 31 currently, whereas it is only 4 for Polygon. Another difference is the reliability of the network, since Solana suffered from a few major outages, while Polygon did not have any major network issue.

Regarding the DeFi (Decentralized Finance) applications, Polygon benefits from most of the major DeFi protocols coming from Ethereum ecosystem - e.g., Aave, Curve, Uniswap; whereas Solana had to develop its own DeFi applications - e.g., Solend, Orca, Raydium; by using its own language - Rust.

Solana and Polygon can also be compared for NFTs, that are among the main applications of these chains. About one year ago, Polygon was the second largest chain, after Ethereum (ETH), for the number of NFT users. However, the situation has evolved in the meantime, since Solana is now the number 2:

NFT User by Chain

Regarding the performance of each coin, they have both dumped in the bear market, and are far away from their All-Time High's, with a larger decrease on the side of Solana vs. Polygon, which could be seen as a lower performance, or, on the contrary, as a larger room for growth, i.e., bigger potential. It should also be noted that the inflation for MATIC token is about 10% per year, whereas SOL inflation is 8%, which is slightly lower, but not significanty.

In summary

Solana has clearly won the NFT battle. However, it still suffers from the impact of network outages. Polygon offers a cheap EVM environment. However, it does not offer anything really different from the other Ethereum layer-2's - e.g., Arbitrum, Optimism; and on top of that it is only poorly decentralized.

Only the future will tell us which one will win. In the meantime, a strategy could consist in remaining exposed to both of them, waiting for a rebound.

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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