Clearly, Ethereum is the undefeated number 1 among blockchains for smart contracts and NFTs. However, the competition is not sleeping. Faster, cheaper, more features, better consensus mechanism – challengers abound and they promise a lot.
Ethereum update planned
Certainly, Ethereum is struggling with some issues. Like many other crypto projects, Vitalik Buterin’s creation is still in development. In recent years, expensive gas fees and high utilization have been the main problems for the network. Therefore, several updates are already being worked on on the way to Ethereum 2.0, which is to become more scalable, faster and cheaper. For example, they want to switch completely to proof-of-stake (see also: Staking).
Most developers and dAps
Despite these issues, Ethereum is still ahead. Currently, Ethereum dominance is just under 20% of the total market capitalization of all cryptocurrencies. Other blockchains with smart contracts and NFTs are far behind. Ethereum still attracts the most developers and dApps. Still, that could change in the future, experts like Nikolaos Panigirtzoglou recently believe.
“In other words, Ethereum is currently in a fierce race to maintain its dominance in blockchain applications. The outcome of this race is far from certain, or so we believe,” Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase & Co. told Bloomberg.
While the true “Ethereum killer” has yet to emerge, it’s worth taking a closer look at the alternatives. There are cryptocurrencies, such as Dohrnii, that can also be tokenized. We have compiled a list of the best Ethereum alternatives.
1. Solana (SOL)
- Year: 2019
- Peak price: 260 U.S. dollars
- Current token quantity: 511,615,946 SOL
Solana is a fairly young blockchain for smart contracts that has nevertheless been gaining popularity in recent years. The project went online in 2019. In May 2021 and then again in September of the same year, the price went really high. The price had increased from $1.7 in January to $224 in November. The SOL token is now in 5th place by market capitalization. So what’s behind the high flyer?
Solana is a proof-of-stake blockchain with a focus on decentralized finance (DeFi) and dApps. Instead of an ordinary PoS process, a combination of staking and “proof-of-history” is used. “PoH” is a special feature of Solana. This is intended to make transactions secure as well as fast and cheap. In addition to smart contracts, Solana has its own NFT marketplaces, such as Solanart.io.
2. Cardano (ADA)
- Year: 2015
- Peak price: $3.10
- Current token quantity: 33,970,000,000 ADA
Cardano has been around for a while. Work on the smart contract platform began back in 2015, and the developers’ stated goal is to create the most efficient blockchain based on scientific principles. Cardano is supposed to be more scalable, faster and cheaper than Ethereum. In other words, a token platform of the new generation.
Cardano already differed from Ethereum at the beginning in that it relied on proof-of-stake from the start. Even now, the blockchain can be used for smart contracts and NFTs. However, Cardano is still in constant development. That doesn’t stop the ADA token from ranking 7th among cryptocurrencies, according to CoinMarketCap.
3. Binance Smart Chain (BNB)
- Year: 2017
- Peak price: $690
- Current token quantity: 166,800,000 BNB
The Binance Coin (BNB) is not only the in-house cryptocurrency of the Binance trading platform. It is also the token of its own smart chain. The fact that there is a demand for such a thing is shown by its ranking on CoinMarketCap: the BNB token is currently in 3rd place by market capitalization.
The Binance Smart Chain provides a bridge between the trading platform and decentralized DeFi marketplaces. Some NFT games are now also on the Smart Chain. However, the focus is primarily on decentralized financial transactions.
4. Polkadot (DOT)
Polkadot (DOT) is a multilayer solution for making different blockchains compatible with each other. Thanks to sharding and other technologies, users can create their own blockchains and connect them to other chains. The blockchains can thus exchange information, cryptocurrencies and other digital assets with each other. Smart contracts do not run on Polkadot itself, but they can be used on the many side-chains.
The network went online in late 2020. The introduction of NFTs was not long in coming: “Enfinity” is the name of the NFT blockchain on Polkadot. Currently, the DOT token ranks 10th by market capitalization.
5. Avalanche (AVAX
Avalanche has set out to knock Ethereum off its throne. The smart contract platform wants to do that with fast transactions. 6.500 transactions per second is what the network is supposed to be able to handle. The mainnet went online in September 2020. Since then, the AVAX token has seen a remarkable rise. According to CoinMarketCap, Avalanche is ranked 12th by market cap.
Avalanche enables the creation of multiple side-chains for its own purposes. Primarily, it focuses on financial services. The AVAX token is limited in number: Currently, only 395,000,000 tokens exist. If you pay fees with them on the blockchain, then they are automatically burned. So the token is getting scarcer and scarcer. By the way, pay attention to taxes when staking – this applies to all staked cryptos.
6. NEAR Protocol
- Year: 2020
- Maximum price: 20 US dollars
- Current token quantity: 1,000,000,000 NEAR
NEAR Protocol is a cloud computing platform based on the blockchain for dApps and smart contracts. Unlike other blockchains, it uses normal account names instead of the usual jumble of numbers and letters of wallet addresses. Furthermore, a special consensus mechanism called “Doomslug” is used.
With “Flux”, the NEAR Protocol already has an application that allows developers to create their own markets for digital assets and create NFTs. Thanks to “Nightshade” technology, transactions are processed in chunks, similar to sharding. This is intended to make transactions even faster. The NEAR Protocol currently ranks 16th on CoinMarketCap.
7. Algorand (ALGO)
- Year: 2019
- Peak price: $3.28
- Current token quantity: 6,908,000,000 ALGO
Algorand sees itself as a next-generation smart contract platform. The mainnet went online in June 2019. Since then, the price has had an eventful development. After an initial hype, the share price dropped rapidly. Since 2021, the ALGO token has recovered previous losses. The price has now settled between 1 and 2 US dollars. In the meantime, Algorand ranks 24th.
Algorand aims to offer faster and cheaper transactions than its competitors and is therefore also one of the best Ethereum alternatives. To do this, they use “Pure Proof-of-Stake.” Stake-holders are chosen randomly and secretly, depending on the size of their stake. Every stakeholder should get a chance to influence the development of the blockchain.
8. Cosmos (ATOM)
- Year: 2019
- Maximum price: 44 US dollars
- Current token amount: 284,010,631 ATOM
Cosmos is a multi-chain solution aimed at improving interoperability among blockchains. That is, Cosmos serves as a bridge between different blockchains. Furthermore, own smart contracts can also be executed on Cosmos. The ATOM token is needed to execute the functions on the blockchain.
Work on Cosmos began back in 2014, followed by the white paper in 2016 and the ICO in April 2017. At the moment, the cryptocurrency ranks 25th. Especially since 2021, the price has seen tremendous growth.
9. Fantom (FTM)
- Year: 2018
- Highest price: $3.48
- Current token quantity: 2,545,006,000 FTM
Fantom is not just another platform for smart contracts and DeFi applications. The blockchain is built on the “Directed Acyclic Graph” (short: DAG), which is already used by IOTA. This means that there is no reliance on proof-of-work miners or stakeholders. The consensus mechanism promises fast transactions with theoretically infinite scalability.
Fantom’s token is called FTM. The amount of FTM is limited to 3,175,000,000, two-thirds of which are already in circulation. The cryptocurrency currently ranks 26th on CoinMarketCap.
10. TRON (TRX)
- Year: 2017
- Peak price: $0.30
- Current token quantity: 101,831,676,125 TRX
TRON is a decentralized platform for entertainment content, for example videos, music or lyrics. Basically a kind of blockchain YouTube. With the help of smart contracts and their own nodes, content creators are supposed to gain control over their own content and no longer have to rely on third parties like YouTube.
After initial hype, TRON got off to a bumpy start, but was able to regain its footing after a dry spell of several years. Meanwhile, the cryptocurrency ranks 28th according to CoinMarketCap.
What is Ethereum Dominance?Ethereum dominance is displayed live on CoinMarketCap. It reflects Ethereum's share of the total market capitalization in the crypto market. Ethereum has been number 2 right behind Bitcoin for years. Its Bitcoin dominance is an important factor in assessing the overall market sentiment. If Ethereum's dominance declines, it could mean that similar blockchains are gaining ground.
FAQ – Frequently Asked Questions
If you are interested in investing, do your research beforehand. Not every project can deliver what it promises. Smart contract platforms like Ethereum are dependent on their users and developers.
That’s difficult to predict. Similar to the early days of the Internet, many projects will probably not exist in ten or more years. If no one uses them, then there’s no reason to keep their networks running.
That is still in the stars. This whole market is still evolving. DeFi, NFTs, blockchain gaming are all growing markets. At this stage, it’s too early to predict who will win the race.