Following the collapse of Terra, increased risk perception could lead AVAX to outperform SOL.
key points:
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Avalanche is a platform blockchain that can handle 4500 transactions per second. Although it has a rapidly growing ecosystem of dapps, the correction in the broader crypto market has affected the price of AVAX.
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Solana is one of the most scalable platform blockchains in the market today. While adoption is increasing, improvements in the broader market have kept the price of SOLs down.
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While Avalanche and Solana will both outperform SOL in the long term, AVAX may outperform SOL in the short to medium term. This has a lot to do with the risk awareness among investors from the frequent network outages of SOL and the collapse of Terra in 2021.
Avalanche (AVAX)
The decentralized application space is on a growth trajectory, and launch platforms are increasing in demand. Avalanche is one of them which has registered rapid growth in a very short span of time. While it is only three years old, Avalanche now has the largest and fastest growing ecosystem of dapps in crypto. This is due to its strong core metrics. These include low fees and high throughput – up to 4500 transactions per second. Avalanche price drops in 2022, despite a rapidly growing dapps ecosystem. This has a lot to do with the bearish nature of the broader cryptocurrency market.
solana
Like Avalanche, Solana is a launch platform for Dapps and has seen a significant level of adoption over the past 2 years. This is due to its scaling capabilities and super-low fees. Solana can handle 50k transactions per second, and has fees as low as $0.001 per transaction. In 2022, there is an increase in investment in the Solana NFT ecosystem to $100 million.
Which is better to buy?
Due to the rapidly growing nature of their ecosystems, both avalanche and solana have strong potential for future development. Now that their prices are at record lows from their previous all-time highs, chances are that both of them could do well once the broader market bounces back. However, the avalanche is more likely to overtake Solana in the next Bull Run.
This has a lot to do with the history of the two networks. The avalanche has been steady since its launch. Solana, on the other hand, has suffered several network outages in the recent past, which has jeopardized its reputation. Following the recent collapse of Terra, it is likely that many investors will be more aware of the risks associated with the cryptocurrencies they invest in. This could hurt the SOL on AVAX in the short to medium term.
conclusion
While both AVAX and SOL are good long term investments, in the medium term the odds are in favor of AVAX. The collapse of Terra Luna has spurred investor awareness of cryptocurrency risks, and SOL has a higher risk appetite than AVX.
