Shubha Roy

Solana vs Ethereum

Thirteen years ago, the first Bitcoin triggered a revolution by launching the first decentralized blockchain ledger. Since then the cryptocurrency space has grown exponentially with new blockchain-based project being launched every week.  Currently, there are 1000 blockchain platforms to choose from and customers often get confused which platform to select. In this blog, we will compare Solana vs. Ethereum.

What is Solana?

Do you know who created Solana? Let us start with when was Solana launched. Anatoly Yakavenko a Russian computer scientist founded Solana.  The crypto was released in April 2019 and the Solona cryptocurrency (SOLUSD) was available in 2020. Solana is a blockchain platform started to run scalable and decentralized app. It is based on the proof of history principle.

If we compare Solana vs Ethereum, Solana processes are much faster than Ethereum and it charges a significantly lower transaction fee. Like Ethereum, Solana provides a platform for non-fungible tokens and decentralized applications (DApps).

Also read: Decentraland vs Sandbox: Complete analysis of the top Metaverses

What is Solana market cap?

Solana introduced in 2020 is relatively new to the cryptocurrency market. The Solana ticker uses  SOL it soared by 12000% in 2021 and Solana market cap is about 12 billion USD.  At one point it was valued at $66 billion and is the fifth-largest cryptocurrency in 2021. The SOL was affected by the cryptomarket fall in 2022 and its valuation dropped to $11.71 billion USD. It is currently in ninth place in market capitalization. If we compare the marketcap of SOL Vs ETH – SOL market cap stands at 56 billion USD while ETH stands at $497 billion USD.

What is Solana tps?

Solana is one of the fastest blockchains in the market. The average Solana tps or transactions per seconds is 2000 tps and the theoretical maximum speed can go up to 710000 TPS. Solana is also affordable with average transaction cost of 0.00025 USD per transaction. Solana affordable and speed make it ideal solution for NFT trading, blockchain video games, or sending SOL to a friend or colleague 

Can you do Solana mining?

Is it possible to do Solana mining because it is proof of stake coin. Solana does provide two essential ways for you to support the network in exchange for perks

• Staking is a method of earning rewards by using a validator to stake Solana that you already own.  A Validator in the Solana network will give you rewards of about 8% for enabling your coins to be staked to help confirm transactions on the network, much like a bank pays interest on your deposits in exchange for using your funds to pay for mortgages and other investments.
• Validation is the process where a powerful server in the data centre verifies transactions on the Solana network. Validators earn a commission on all the rewards produced by anyone who stakes with you.

Also read: 8 best list of smart contract platforms

What are the different Solana programming language used?

Solana allows developers to write on-chain programs in languages such as C, C++ or Rust. There are different Solana programming – dApps and smart contracts. Although Solana programs are the basis of Solana programming, Solana dapps can be built using on-chain data and Solana wallets like Phantom without creating any Solana programmes. Even though the programs allow tokens to be created, you can do it without writing your own Solana programme. So, everything depends on your preferences and aims. As a programmer you can also use Moralis for programming.

Why are Solana gas fees so low?

When you compare Solana vs Ethereum in terms of gas fees you find Solana gas fees much lower. Solana average gas fees is 0.0025  per transaction while Ethereum charges $3-10 per transaction. Solana is one of the fastest blockchains on the market. It outperforms Ethereum in terms of block size (20,000 transactions) and block time (0.4 seconds) (block time: 13 seconds, block size: 70 transactions).  The Solana network offers an exceptionally cheap transaction cost is made possible by the greater block time and block size. 

Can you build a coin off Solana?

Before you build a coin off Solana, you need some Solana. To get Solana, you can airdrop from your terminal. You can use the Token program written in Rust to create your own tokens.

Also read: 10 Best Defi Wallet 2022 | Top decentralized finance cryptocurrency wallets 

What are Solana smart contract?

Solana smart contract can be broken into two parts – the Solana network and smart contracts. The network features smart contract and developers can create Web3 projects and dapps that are supported by the Solana blockchain. Solana uses a hybrid consensus process that combines proof-of-history (PoH) and proof-of-stake (PoS) (proof-of-stake). Solana is able to keep transaction speeds high and prices low by utilising the two techniques. The focus on speed and scalability also makes Solana programming faster and more cost-effective than other rivals.

 

Ethereum blockchain

Ethereum blockchain was created to power thousands of decentralised transaction (ETH).  The blockchain is used for building decentralized apps and smarts contracts. Ethereum is designed to be scalable, programmable, secure, and decentralized. There are no restrictions on what the users can do to promote creativity. The network interactions or transactions are stored on the Ethereum blockchain. Before committing them to the network and serving as a digital ledger or transaction history, miners validate these blocks. Proving transactions by mining is referred to as a proof-of-work (PoW) consensus technique.

What is Ethereum market cap?

If we compare Solana vs. Ethereum for market cap we can see both blockchains have their own native currency. Ethereum market cap is 178.4 billion USD, with more than 121.7 million ETH coins in existence as of July 2022. Ethereum is second most used cryptocurrency after bitcoin. The Solana blockchain does not have a set maximum supply of SOL. Instead, it uses set inflation rate that is declining over time and reaches 1.5% over in the long run. Solana’s market cap is 12.57 billion USD. 

What is Ethereum transactions per second?

Ethereum transaction per second takes 13-14 seconds to mine one Ethereum block. However, after switching to a proof-of-stake system, the validation time for one block will be cut in half to 12 seconds, which will still be faster even though it won’t be noticeable to the user. Ethereum 1.0 has transaction per second of 30 TPS. If we compare Solana vs Ethereum 2.0 TPS, Solana can process over 50000 transactions per second while Ethereum 2.0 is said to process 100000 transactions per second.

Also read: 16 Best Metaverse crypto projects you should know about

Are Ethereum investment worth it?

Many new investors wonder are Ethereum investments worth it. Since its 2014 official launch, Ethereum has been doing well. Given the asset’s historical record, investors who allowed it enough time to develop will probably have received excellent returns. No matter when an investor purchases ETH, in the past, it has been possible to make money by simply waiting, making ETH a fantastic long-term cryptocurrency investment. Ethereum continued to grow steadily till 2018. The prices fell in 2022 with inflation and war concerns. Experts feel the price Eth should hit 7985 USD.

What is difference between eth vs eth2?

There is a lot of speculation what is difference between ETH vs ETH2. ETH 2.0 is considered to be an upgrade of the Ethereum blockchain. Ethereum Foundation updated the system was updated to improve the network speed, efficiency, and scalability. 

• Ethereum 2.0 blockchain utilizes PoS (Proof of Stake) instead of PoW (Proof of Work) for this function. Ethereum 2.0 has a new consensus mechanism where validators hash the new block.
• ETH2 has introduced the sharding mechanism where data is over multiple processors to improve processing speed. Ethereum has introduced 64 shards. 
• Beacon chains is another difference between Eth and ETH 2.0. 

What is Ethereum blockchain size?

Ethereum operates on a decentralized storage system with a peer-to-peer network of user operators who hold a portion of the data and create a strong file storage sharing system. The blockchain can serve as a decentralized storage system, and it does so when it comes to smart contracts’ code storage. It was not designed for handling massive volumes of data, nevertheless. Although the chain is constantly expanding, it is currently between 500GB and 1TB in size (depending on the client), and every node on the network must be able to hold all of the data.

Also read: Metamask vs. coinbase wallet | Best crypto wallet comparison

Who are the top ETH competitors?

Some of the top ETH competitors or alternatives are- 

• Solana – Solana native currency is SOL with a market cap of 15.79 billion USD. Several large financial institutions like JPMorgan and Bank of America are bullish about its prospects. 
• Cardano – Cardano is a potential Ethereum substitute that is more environmentally friendly. The current market value of its native currency, the ADA, was roughly 18.25 billion USD.
• Tezos – Tezos is another decentralized application blockchain. The native currency of Tezos has a current market cap of 1.73 billion USD.
• Polkadot – The native currency of Polkadot is DOT with a current market cap 11.01 billion USD.

Why is Ethereum better than Bitcoin?

Ether and Bitcoins are the two leading cryptocurrencies in the market. Bitcoin has a market cap of 380 billion USD while ETH’s market cap is 180 billion USD. But why is Ethereum better than bitcoin. Ethereum has more real-world applications like NFTs, smart contracts, and decentralized finance protocols.  Bitcoin is primarily known as a store of value and for transactions. Ethereum will soon be converting proof of stake mechanism and will be running on superior technology. The blockchain will be faster, cheaper, and better. Bitcoin remains on proof of work technology.

Also read: Polkadot vs Cardano | Compare Ecosystems, Features, Prices

Ethereum vs Bitcoin vs Polkadot

Ethereum is a decentralised blockchain platform that enables peer-to-peer networks to execute and verify application code in a safe manner, also referred to as “smart contracts.” Participants will be able to conduct transactions without the necessity for a reliable intermediary or centralized authority. Ethereum shifted to Proof of stake protocol in 2022. 

Polkadot is a multichain network can handle transactions between para chain or parallel chain. Polkadot has over 100 chain linked to the network and has speed of 1,000,000 transactions per seconds. 

Bitcoin was the first online cryptocurrency launched in 2009.  It was pioneer to cryptocurrency. Bitcoin uses proof-of-work network, which allows the network nodes to concur on the state of all information collected and guards against certain network assaults.

How do I add avalanche to MetaMask?

Avalanche (AVAX) is a cryptocurrency and blockchain platform that has been introduced as Ethereum’s rival. Avalanche is a cross-chain project – Avalanche X-Chain and Avalanche C-Chain. The Avalanche X-Chain can only be added to the Avalanche wallet, while the Avalanche C-Chain can be added to the MetaMask wallet. In this blog, we examine how to add Avalanche to MetaMask. 

How do I set up MetaMask? 

Before you can connect, Avalanche to MetaMask, you must first learn how to set up your MetaMask wallet. The process is organic with the following steps –  

• MetaMask is a cryptocurrency wallet that is available as an IOS and Android app store and a browser plugin for Firefox and Android. You can use MetaMask to store and transact crypto through the user-friendly interface. 
• Download and install MetaMask extension – We start by downloading your preferred MetaMask extension for Chrome, Firefox, ioS, or Android from the MetaMask official website. Cross-check it is the current website before you start the downloading process.  
•  Install the wallet – The installation process is straightforward. Once you install the wallet, you should see the MetaMask fox on the screen. Now click on Get Started.
• Create Wallet – You have two options – create a new MetaMask wallet or import a wallet – this is if you already have a MetaMask account. You will need to use your secret recovery phrase.

Also read: Metamask vs. coinbase wallet | Best crypto wallet comparison

Select create wallet if you want to set up a new wallet. After agreeing to some standard terms and conditions, create a unique password. MetaMask will show you a secret phrase that contains 12 random words. Copy the phrases in their exact order and store them carefully. It is a backup in case you lose your phone or laptop.

Installing MetaMask extension firefox

• Always download your wallet extension from the official MetaMask website. The download button is on the top right-hand corner of the MetaMask homepage. 
• Select the firefox option to download the MetaMask extension firefox.
• Click Add to Firefox on the Metamask shop listing page.
• Chrome will confirm that you are truly interested in installing MetaMask. After reading the disclaimer, click Add.
• After MetaMask is installed, click to launch your wallet.

MetaMask Android Installation

The MetaMask mobile app has two components – a wallet and a browser. The wallet supports any Ethereum-compatible cryptocurrency, and the web browser is already set up to work with dapps and smart contracts. You can download the MetaMask app from the Google Play Store. Always verify that you are downloading the right version. Being extra cautious while downloading can prevent the loss of funds. 

Getting started with MetaMask is a straightforward process. There is no need for a personal email address or identification. The two key parts of the procedure are seed phrase backup and password creation. In a few minutes, you’ll be prepared to use your wallet.

Also read: How to write a smart contract? | Step-by-Step Guide

How to add funds to MetaMask?

It’s easy to add money to your MetaMask, but if you do it incorrectly, you risk losing it all. Here is how to add funds to your Metamask wallet.

You can transfer money from a cryptocurrency exchange or purchase ETH or ERC-20 tokens directly on Metamask.

Purchase ETH or ERC-20 using Metamask.

You might be able to buy Ethereum straight on Metamask with a credit card or debit card, depending on where you live. You should be aware that using this approach may result in higher costs, and you might not get your ETH immediately because transactions often take a while to complete.

Add Money From a Bitcoin Exchange

You can transfer bitcoin into your Metamask wallet by using a reputable exchange like FTX, Coinbase, or Binance. You do have to pay withdrawal fees while purchasing ETH on FTX and depositing it into Metamask. After you buy the currency, you can enter your MetaMask address in the receiver’s address.

Also read: Decentraland vs Sandbox: Complete analysis of the top Metaverses

How to buy MetaMask coins from your wallet?

It is easy to buy MetaMask Coins from your wallet. Select “Buy ETH” on your wallet on your home screen. You can buy ETH with a credit card, a bank transfer, or Apple Pay (the US only). Your account’s balance in MetaMask ought to change a few minutes after the transaction has been “mined” on the Ethereum blockchain and has been processed. By clicking the pop-up link, you may view the status of your transactions on a block explorer like Etherscan. 

How to send money from Coinbase to MetaMask?

Users can use Coinbase Pay integration to help them purchase or transfer within their MetaMask wallet. Coinbase Pay is a new crypto purchase service from Coinbase.

• To begin, click the blue “Buy” button on the home page.
• Select the Coinbase Pay option
• Go to your Coinbase account and log in (for first-time users)
• Choose the coin that you want to use to top up your MetaMask wallet.
• To purchase the desired token, select the funding source from your Coinbase crypto balance or one of your saved payment methods.
• Check your purchase, then press “Confirm.”

How to add time to MetaMask?

If you want to add Time tokens to MetaMask you can stake them on the Wonderland app. You can import Time as a custom token. 

• You need to use your wallet while you are on the Avalanche network.
• Click “Import Custom Token” after choosing “Import Tokens.”
• Copy the Avalanche C-Chain contract from the CoinMarketCap
• Cross-check that Time is recognized and select Add Custom Token.

Also read: Why are NFT Gas fees so high? | Deep dive into gas fees

Can MetaMask hold bitcoin?

Can MetaMask hold bitcoin? No, MetaMask is based on the Ethereum blockchain and it is not possible to buy and store Bitcoins in your MetaMask wallet. BitCoin on the other hand is based on the blockchain. If you want to store your Bitcoin in your wallet – you can either swap it for Ethereum or wrap it up. This means when you purchase bitcoin and choose to wrap it, you are tying the value of your bitcoin to another Ethereum-based currency.

How to add Avax token to MetaMask – Step by Step

In contrast to other cross-chain projects, the Avax ecosystem operates two chains: Avalanche X-chain and Avalanche C-chain. You cannot utilize Avalanche X-chain on Web3 platforms or add it to Web3 wallets like MetaMask. The chain can only be used to receive and transmit Avalanche tokens (AVAX). Only the Avalanche wallet has access to the X-chain. You can add Avalance C on the MetaMask platform, which is utilized by Defi and other decentralized application platforms.

There are two ways you can add AVAX to MetaMask

How to add Avalance to Metamask manually

Step 1: Log in to your MetaMask wallet and click on the network bar located in the top right-hand corner. The bar lets you know which network your wallet is currently on. 

Step 2: Select Add Network from the drop-down

Step 3: Enter details into the pop-up form with the following fields. 

• Network Name: Avalanche Network
• New RPC URL: https://api.avax.network/ext/bc/C/rpc
• ChainID: 43114
• Symbol: AVAX
• Explorer: https://snowtrace.io/

Step 4: Click save. 

You can now select the Avalanche Network from the Network Menu. 

Another method of adding Avalanche to MetaMask through Snowtrace 

Add Avalanche network to your MetaMask wallet is via the Avalanche network explorer

Step 1: Visit Snowtrace website. Snowtrace is a blockchain explorer for Avalanche. 

Step 2: Click “Add C-Chain Network” on the bottom right-hand corner of the website. If you have not already logged in to your MetaMask wallet, you will be prompted to after selecting this option. Confirm the connection request, and you are set.

How to Send AVAX to the MetaMask from Avalanche Mainnet

Now that you’ve set up MetaMask on Avalanche Mainnet you may wish to transfer Avax to your wallet. If you have funds on the P or X chain you need to move to the C Chain before they can be sent to your wallet. After all the funds are in the C Chain you can send funds from your Avalanche wallet to your MetaMask wallet. 

• Select send
• Select “C Contract” as the Source Chain.
• Enter your MetaMask address into your Avalanche wallet’s “To Address” field. We recommend you copy-paste the address to prevent errors.
• Confirm and finalize transactions.

How do I add the Avalanche Fuji testnet to MetaMask?

Avalanche Fuji Testnet is a testnet for Avalanche Mainnet (AVAX). You can add Avalanche Fuji TestNet in two ways 

• Chainlist – Visit chainlist.org and connect to the MetaMask wallet. Search for Avalanche Fuji Testnet and click on “Add to MetaMask”. You can open your MetaMask Wallet and select Avalanche Fuji Testnet from the network drop-down box. 
• Custom RPC in MetaMask – Open your wallet and select network. Select the Custom RPC option. Fill in the following information

Network Name: Avalanche Fuji Testnet

New RPC URL: https://api.avax-test.network/ext/bc/C/rpc

Chain ID: 43113

Currency Symbol: AVAX

Block Explorer URL: https://cchain.explorer.avax-test.network 

Save and switch to the Avalanche Fuji Testnet network.

What is an avalanche wallet?

An Avalanche wallet is a non-custodial wallet to store your Avalanche assets. You can access the Avalanche ecosystem of decentralized applications thanks to it (DApps). Three different address types are available in an Avalanche wallet: X-Chain, C-Chain, and P-Chain. Any of the three chains can be used to hold cryptocurrencies for a variety of uses. In summary, you can engage with smart contracts on the C-Chain, store assets on the X-Chain, and stake coins on the P-Chain. Within the Avalanche Wallet, you may easily transfer your tokens between the three chains. To move assets from your wallet you need to use a chain compatible with the destination wallet.

Also read: Defi vs Cefi | Decentralized Finance VS Centralized Fiance

How to send Avax from Coinbase to MetaMask?

Coinbase is well known for its reliability. It can be used to purchase Avax tokens. To send Avax from Coinbase to MetaMask. 

• Find the MetaMask Wallet- You need to manage your MetaMask wallet settings. After you add the Avalanche Network to Metamask, you can copy your wallet address by clicking Account. 
• Open your Coinbase profile – Log in to your Coinbase account and go to send/receive page. A list of all your assets including Avax will be listed on the page. 
• Click on Transfer Avax – Choose the Avax Token and click the Send option. Click continue on the pop-up menu.
• Enter your MetaMask address and confirm the transaction- To send the coins paste your MetaMask address on Coinbase. Cross check you have entered the correct address and click send. The money should appear in your wallet shortly.

How to bridge eth to Avax

The best way to bridge ETH to Avax on your MetaMask Wallet is through the official Avalance Bridge. You need to follow these steps- 

• Create your MetaMask wallet with the steps outlined above and fund your wallet.
• Go to the Avalance Bridge and select the ‘Connect MetaMask Wallet’ option.
• Enter the number of Ethereum you want to bridge. 
• Select ‘Transfer’ and wait for the on-chain transaction to finalize. It can take anywhere between 5 to 10 minutes to complete the transaction.

How to swap Avax for time?

If you want to learn, how to swap Avax for time, you need to purchase Avax. You can buy Avax from a Crypto exchange like Coinbase and swap it for time on Trader Joe DEX.

New to the concept of decentralized finance? In this blog, we deep dive into the difference between Defi vs Cefi. Understand the differences with examples, use cases and features. Let’s begin!

Defi vs Cefi

Cryptocurrencies were invented with the intent of decentralizing the financial trading system. Decentralized Finance (Defi) is built as an open-source, permissionless, and transparent financial service ecosystem. Centralized finance CeFi is a type of financial practice within the cryptocurrency sphere where users can interest and get loans through centralized platforms. 

What does Defi mean?

Let us begin with, what does Defi mean? Decentralized finance or Defi is an emerging financial technology based on secure distributed ledgers. The system removes the monopolies of centralized financial institutions (banks and financial institutions) have on money, financial products, and financial services. Defi is a global, peer-to-peer, pseudonymous system that is open to everybody. Defi finance aims to create a more open, free, and fair financial system, accessible to anyone with an internet connection.

What are Defi tokens?

The Defi ecosystem is an interconnected system of non-custodial protocols, platforms, and services. You can use Defi tokens to access financial services like loans, lending, and insurance. Defi tokens are coins that are a part of automated, decentralized networks and use smart contracts to operate. Users can use the tokens to access financial services built on blockchain. Defi tokens command a $114 billion market cap.

Also read: 8 best list of smart contract platforms

What is Defi pulse?

Defi Pulse Index (DPI) is an ERC-20  token that can track the performance of tokens within the Defi industry. Defi Pulse aims to facilitate exposure to Defi through one single asset. It tracks Defi projects that have a significant usage with a commitment to maintenance and ongoing development within the Defi community. DPI is not a synthetic asset, holders can swap DPI for tokens that comprise the capitalization-weighted index.

What is Cefi?

What is Cefi? Cefi or Centralized finance offers some of the benefits of decentralized finance and the security of traditional financial service products. In Cefi all crypto trading orders are routed through a centralized exchange. The Cefi exchange manages the money. You do not have access to your wallet because you do not have a private key. Exchanges select the currencies available for trading and the fees that need to be paid to trade on their platform. 

What are CeFi tokens?

Cryptocurrency exchanges are platforms for buying, selling, and trading cryptocurrencies and are an integral part of the blockchain platform. Centralized finance tokens are digital assets that are native to the cryptocurrency exchange. Top CeFi tokens are,

• BNB
• Cronos
• UNUS SED LEO
• FTX Token
• KuCoin Token

Also read: 9 Best Metaverse platforms everyone should know about

Defi use cases

Defi ecosystem is exciting, with new activities and projects being announced regularly. Some of the top Defi use cases are,

• Borrowing and lending – Defi lending and borrowing are very popular. Crypto investors lend cryptos to earn passive in Defi. Most loans in Defi are through smart contracts with the borrower giving higher collateral than the borrowed value. 
• Deexes– Decentralized exchanges or Dexes are smart contracts that allow users to sell, buy, or trade cryptocurrencies or tokens. Deexes run on the Ethereum blockchain and the exchanges operate without a central authority. Smart contracts enforce the Defi regulations, execute a trade, and handle funds when required. 
• Defi platform Assets– Tokenized assets and asset management is a fast-growing sector in Defi. Existing financial assets deployed to the blockchain as tokens fit into the Defi protocol, increasing their utility. 

Use cases for CeFi

Some use cases for CeFi are,

• Coinbase – With over 56 billion users, Coinbase is the leading cryptocurrency exchange.  The exchange offers a range of products such as a trading platform and a wallet for retail investors. 
• Binance – Binance is a leading cryptocurrency exchange with its service available in 80 countries. It has a strong focus on altcoin trading and offers trading in more than 500 cryptos and virtual tokens. 
•  Hodlnaut provides financial services to investors and cryptocurrency enthusiasts. It is one leading crypto lending in Asia.

Features of Defi

Decentralized Finance has changed the conventional notions regarding finance, using cryptocurrency and decentralized blockchain for the management of financial transactions. Features of Defi are –

• Permissionless – Defi follows the open and permissible access model. Anyone with an internet connection and crypto wallet. 
• Programmability – Most Defi solutions are on the Ethereum network. 
• Transparency – Transparency is a core feature of the Defi ecosystem.  Every transaction is broadcast to the users in the network. All users should verify the transactions broadcast to them. Ethereum addresses are encrypted ensuring anonymity. Defi apps use open-source code any user can view, audit, and develop the existing code. 
• Immutability – Defi revolution has ensured financial inclusion for everyone. People using Defi blockchain need assurance that data will not be compromised. Defi technologies use blockchain technology to ensure the data is secure and immutable. 
• Interoperability – A key characteristic of Defi is interoperability. Since most Defi applications are Ethereum it ensures protocols and applications can complement one another. Developers can create solutions or add functionalities on top of existing protocols. 
• Non-custodial – Users have complete control over their assets and personal data. Users can use web3 wallets to interact with permissionless financial protocols and applications. Defi solutions promote a new age of financial services tailored for the customer.

Also read: 10 Best web3 wallet | Price, Safety, Features

Features of CeFi

Features of CeFi are,

1. Centralized exchange

Users can send funds to the central exchange to manage the funds through an internal account. The funds are stored within the exchange and are kept outside the user’s custody, and are vulnerable to threats in case the exchange’s security measures fail. 

2. Flexibility of Fiat conversion

You need a centralized exchange when conversing between fiat and cryptocurrencies. Onboarding customers into the CeFi finance ecosystem are convenient.

3. Cross-chain services 

CeFi services support trading LTC, XRP, BTC, and other coins issued on independent blockchain platforms. CeFi gets custody of funds from multiple chains. Many frequently traded and highest market cap coins exist on independent blockchains and do not have interoperability standards.

How does Defi work?

How does Defi work? Defi uses cryptocurrencies and smart contracts to provide services eliminating the need for intermediaries. In the conventional financial world, financial institutions act as guarantors of transactions. Financial institutions are powerful because your money is routed through them. In Defi, smart contracts replace financial institutions.

A smart contract is a type of Crypto account that can hold funds and send/refund them based on conditions laid out in the contract. Once live, the smart contract cannot be altered and will run as programmed. Contracts are public and can be inspected and audited by anyone. Bad contracts often come under the community’s scrutiny quickly.

How does CEFI lending work?

You can use CeFi to borrow and lend money. But how does CeFi

lending work? Collateralized Crypto loans typically require less paperwork than traditional bank loans. CeFi makes it possible to borrow money against your crypto holdings, the same way you need collateral to apply for a loan. 

The CeFi lending platform has an underrated and underutilized potential

and can give returns of 10%. There are many CeFi lending platforms and some lending platforms are location specific. Before lending, you need to think about,

• Which tokens will you lend?
• How much will you lend?
• Where are you located?
• Which currency receives the most interest?

Also read: Top 10 best ethereum wallets | Detail Explanation

Examples of Defi

Examples of Defi are,

• Totle is an aggregator of decentralized liquidity with price automation.
• Augur is a decentralized prediction market.
• Nexus Mutual is a decentralized insurance tool. 
• Kyber is a decentralized exchange
• Maker Dao is a decentralized stable coin minting and lending tool

Examples of CeFi exchanges

Examples of CeFi exchanges are,

• Coinbase is a cryptocurrency exchange that offers various services such as trading, borrowing, margin trading, native stable coin, and lending.
• Fairlay is a Bitcoin Prediction Market and Exchange. 
• BlockFi is a cryptocurrency flat borrowing and lending platform.
• Celsius is a cryptocurrency flat borrowing, payment, and lending platform.
• Ledn is a global financial infrastructure and cryptocurrency layer.

Defi vs. CeFi comparison

Defi and CeFi platforms encourage people to use blockchain and digital currency. Both platforms provide various crypto-based financial services. If we make the Defi vs. CeFi comparison, they have different approaches. Defi users trust the technology will perform as proposed to execute services, while CeFi users trust the business’s people to manage funds and execute the business’s service.

1. Defi verification vs. CeFi verification

If we compare Defi verification vs. CeFi verification methods – In Defi the transactions are recorded on blocks and are verified by other users. Once the transaction is verified and ratified the transaction, the block is closed and encrypted. It uses smart contracts and blockchain technology to eliminate the need for intermediaries. CeFi act as intermediaries to manage crypto transactions and activities of users.

Also read: How to create erc20 token? | Step-by step guide

2. Defi fiat vs. CeFi fiat

If we compare Defi fiat and CeFi fiat we learn that when it comes to converting money to Bitcoin or any other cryptocurrency centralized finances have a lot more flexibility. Because fiat to cryptocurrency conversion requires a centralized institution, most Defi services do not provide fiat on-ramps. Customers can be onboarded faster in CeFi.

3. Cross Chain service

The traditional blockchain system is a siloed structure preventing two non-native blockchains from interacting. Cross-chain services enable interoperability across independent blockchains to interact and exchange data. Because of the inherent complexity of the system, Defi did not permit cross-chain services. But new cross-chain Defi technology allows for multi-chain smart transactions, helping in interoperability. CeFi by default offers cross-chain services. CeFi gets custody of coins from multiple chains.

4. Inflation

Inflation is defined as the depreciation of an existing currency supply because of the addition of a new currency supply. Central banks retain the capacity to create fiat money in CeFi, and inflation is frequently measured against the consumer price index. The asset supply of different cryptocurrencies is subject to alteration in the Defi universe. Bitcoin (BTC) is likely to run into a scenario where supply has a set limit, but still the business output it needs to support does not, resulting in a price collapse.

5. Defi privacy vs CeFi privacy

If we examine the difference between Defi privacy and CeFi privacy – Defi apps are on smart contracts and offer a high degree of privacy, while Cefi exchanges have a right to reveal the wallet address of the user.  Many Defi applications are managed by anonymous teams. The miners execute Defi smart contract as per the terms of the contract, once the contract was installed.  While Cefi users need to complete KYC procedures, they have to share information or deposit money before accessing services.

6. Defi risk vs CeFi risk

If you want to compare Defi risk vs  CeFi risk, Defi is riskier than CeFi. Defi promise to be an automated, transparent, and decentralized financial platform. However, there are some risks involved in Defi such as bugs in the software, counterparty risk, token risk, regulatory risk, impermanent risk, and gas fees. Risks on Cefi are lower as trained financial experts manage funds and execute the business services. Users shift the risks to the exchange.

7. Defi market vs CeFi market

If we compare the Defi market vs CeFi market we learn that because of the nature of blockchains,  most Defi markets are open 24×7. Defi does not have pre and post-market trading. On the other hand, CeFi markets are known for experiencing outages. The New York Stock Exchange and Nasdaq Stock Exchange, have working hours from 9.30 am to 4.00 pm. During pre and post-market trading where liquidity on a variety is thin in this period.

8. Defi cost vs CeFi cost

The difference between Defi cost vs CeFi cost is as follows – Users need to pay gas fees to process the transaction in Defi. Most Defi transactions are on the Ethereum blockchain. Gas fees are usually typically Gwei, a smaller fraction of Ether (ETH), Ethereum native token. As the number of Defi users increased the gas fees skyrocketed.  To avoid the hassle of Anti-Money laundering verification, CeFi platforms choose to offer transaction services for free or are compelled by the government to offer some services for free. CeFi can have higher transaction fee due to third-party compliance.

Also read: Why are NFT Gas fees so high? | Deep dive into gas fees

9. Defi crypto assets vs. CeFi crypto assets

Let us examine the difference between Defi crypto assets vs. CeFi crypto assets – Defi tokens are assets similar to coins and are created on preexisting blockchains. Defi crypto assets will play a prominent role in their ecosystem. Defi tokens have the highest market cap.  Aave-Aave, Synthetix-SNX, and yEarn yFi are some top-performing Defi tokens. CeFi assets allow borrowing, lending, and payment services.

10. Defi development vs. CeFi development

Notable differences between Defi Development vs. CeFi development is there are many companies and developers helping in Defi dApps Development, Defi smart contract development, Defi wallet

development, Defi landing platform development, Defi Token development, and Defi exchange development.  Many Defi apps are open source and the code can be viewed. CeFi Development is done by CeFi companies.

11. Defi coin support vs. CeFi coin support

We discuss the difference between Defi coin support vs. CeFi support. Defi coin allows you to invest in the Defi swap ecosystem. Similar to fiat coins Defi coins transfer value in the course of the financial transaction. Some Defi coins are  Maker, Compound, Uniswap, Aave, Chainlink, and Ankr. CeFi coin supports trading in LTC, XRP, BTC, and other coins issued by other blockchain platforms. Cefi allows for cross-chain swaps.

12. Defi transparency vs. CeFi transparency

Comparing Defi transparency vs. CeFi transparency, we learn Defi is more transparent. The rules and smart contracts are publically available and additional meta-information help observers study the data. Many Defi programs are open-source and the code is open to audit and scrutiny. 

FAQ’s on Defi vs CeFi

Both Decentralized and Centralized finances aim to popularize crypto trading. In CeFi, users put trust the business will take care of user’s funds and Defi users trust the technology will perform as quoted. CeFi has a larger market cap when compared to Defi and is simpler to use. Here are some common faqs on Defi vs. CeFi.

1. What is the difference between Defi and crypto?

Defi	Crypto
Defi allows you to borrow, lend, and trade in cryptocurrencies.	Cryptocurrencies store value much like fiat currency that operates on their own currency.
Defi uses smart contracts to validate transactions.	Crypto uses proof of concepts and miners validate transactions.

Also read: How to write a smart contract? | Step-by-Step Guide

2. Is Coinbase CeFi and Defi?

Coinbase is a CeFi firm it is a well-known cryptocurrency exchange that allows for buying, selling, and exchange of cryptocurrencies like Bitcoin, Ethereum, and Dogecoin. Coinbase has two products Coinbase platform to buy and sell orders and Coinbase pro with more features for advanced users. Coinbase operates in over 100 countries and manages a robust cryptocurrency ecosystem supporting 13,000 financial intuitions.

What is the best Defi crypto?

Defi is said to be the next big thing in cryptocurrency and blockchain platforms. Defi projects aim to provide traditional financial services such as loans, saving accounts, and asset exchange without a middleman or intermediary. The best Defi cryptos are-

• Defi Coins
• Lucky Block
• Uniswap
• Terra
• Decentraland

Are all Defi built on Ethereum?

A vast majority of Defi runs on Ethereum. Ethereum was created as a smart contract platform. Smart contracts are bought in the concept of self-executing contracts. However, Ethereum is slow. Visa handles over 1, 700 to 2400 transactions per second (TPS) while Ethereum can manage only 10 to 15 TPS. Transactions pile up faster, leading to delays and higher transaction fees. Defi is available on other blockchains like – Avalanche, Binance smart chain, Polygon, Polkadot, Solona, and Cardano.

Blockchain technology is rapidly growing. Polkadot and Cardano are two most promising blockchain protocols in the market. In this blog, we examine the difference between Polkadot vs Cardano. Let’s begin!

Polkadot vs Cardano

Blockchains are moving beyond cryptocurrency. Experts feel the distributive ledger technology will be transformative. Both Polkadot and Cardano are proof-of-stake blockchains. Both cryptocurrencies are the top-performing cryptocurrencies. Investors and crypto enthusiasts are very excited about the potential of the two currencies. 

What is Polkadot?

Polkadot is a protocol that connects blockchains – allowing information and values to be sent across previously incompatible networks like Bitcoin and Ethereum. Gavin Wood designed Polkadot to be fast and scalable and is the next-generation blockchain promoting a heterogeneous multi-chain framework. Polkadot crypto is called DOT. The Polkadot ecosystem is resolving the current limitation in blockchains, such as scalability and security.

Polkadot blockchain

Polkadot blockchain is the next-generation blockchain protocol that allows multiple blockchain ecosystems to communicate. It has become popular, and the Polkadot market cap is one of the top cryptocurrencies. Polkadot blockchain has the following features,

• Enable different blockchains to connect.
• Users can build a blockchain in their Substrate framework.
• Host blockchain and handles their security and transactions. 
• Bridges blockchain on Polkadot with other networks.

Also read: 10 Best web3 wallet | Price, Safety, Features

Best Polkadot wallets

Polkadot has become one of the top-performing cryptocurrencies. Many wallets accept DOT coins. You need to Polkadot wallet to send, receive, stake, and buy Polkadot tokens and coins. The best Polkadot wallets are,

• imToken is an app made for Android and iPhones. 
• TokenPocket is a software-based wallet app.
• Cool Wallet Pro is a hardware wallet and uses encrypted Bluetooth technology to connect with your smartphone. 
• Ledger Nano is one top hardware wallets accepting Polkadot cryptos. 
• Atomic Wallet was one of the first wallets to support multicurrency.

How to write Polkadot smart contract?

Smart contract developers use the underlying features of Polkadot to develop smart contracts. Parchains support Polkadot smart contract, and the substrate supports smart contract through,

• Frontline EVM palettes are tools enabling the substrate to run Ethereum contracts natively within the same API/RPC interface. 
• The contract palette is in the frame library, and the substrate has a built-in contract palette. 

The deployment method may vary, but the logic will be the same. You need to send a transaction to create a contract and pay the required storage and initiation fees.

Also read: Top 10 best ethereum wallets | Detail Explanation

Where to stake Polkadot?

Where to stake Polkadot? Staking is a good way for crypto owners to earn some passive income. You need a minimum of 120 DOT to become a validator on Polkadot. You can join a staking pool for a smaller amount, and the amount varies depending on the platform. You can stake Polkadot in crypto exchanges or liquid staking platforms. Some of the best platforms to stake Polkadot are,

• Kraken 
• Binance
• KuCoin
• Lido
• Bitfnex

Polkadot use case

Many experts believe Polkadot tokens will grow in the future. Polkadot blockchain is more versatile than Ethereum. Developers can use multiple platforms while developing Polkadot projects. You can use Polkadot to experiment on the blockchain.

Developers can use drop and drag templates to build blockchain networks quickly. They can create and deploy new Polkadot projects faster and at lower costs. Polkadot use cases use parachain or relay chains such as e-commerce applications and interaction with the government.

How does Polkadot work?

Let us learn how does Polkadot work? Polkadot can process so much information because the parachains do the heavy lifting for the main relay chain. The Polkadot network can process over 1,000 transactions in one second compared to 7 for Bitcoin and 30 for Ethereum. As Polkadot grows and more Parachains are added, Polkadot should get faster.

The relay chain helps to achieve consensus and transaction delivery. Parachain is an application within the Polkadot network, and each Parachain is an entire blockchain by itself.

Polkadot gas fees

Polkadot gas fees follow a weight-based fee model instead of to gas-metering model. Polkadot charges fees before the transaction and executes the transaction only after you pay the fees. Polkadot calculates gas fees on three parameters,

• A weight fee-base weight and called weight
• Length fee
• A tip (optional)

Also read: Why are NFT Gas fees so high? | Deep dive into gas fees

What is Cardano?

Cardona is one of the leading cryptocurrencies in the world. Charles Hoskinson designed Cardano to be a flexible, sustainable, and scalable blockchain platform for running smart contracts. The cryptocurrency is called Cardano, and the individual units are called ADA. The decentralized system validates the transaction, verifies its integrity, and ensures the system is robust and error-free. Cardano uses proof-of-stake technology, where currency owners validate transactions in exchange for a reward.

Cardano blockchain

Cardano blockchain is an open-source and decentralized, and proof-of-stake named Ouroboros. Proof-of-stake (PoS) blockchains use less energy than proof-of-chain blockchains. Within the Cardano platform, Ada exists in the settlement layer and keeps track of transactions. The second layer is called the computation layer and enables smart contracts and applications to run on the platform. Cardano blockchain can implement Defi and dApps.

Top Cardano wallets

Cardano is a smart contract platform that runs on Cardano Ada. Charles Hoskinson launched the blockchain in 2015, and Cardano crypto has become one of the top-performing cryptocurrencies in the world. You need a Cardano wallet to store, send, receive, and stake Cardano crypto. Daedalus Yoroi and CCVault are some of the best software wallets for Cardano stalking, while Ledger Cardano Nano and Trezor Model T are some of the best hardware wallets.

What is the Cardano smart contract?

Cardano smart contracts are executable programs running on the Cardano blockchain. Ada Cardano smart contracts are digital agreements or guarantees between parties. The transactions are executed only when the contractual conditions are fulfilled. After the conditions are met, the contract is executed automatically. Cardano smart contract programmers use Plutus, Marlowe, or Glow to write a contract.

• Plutus is a purpose-built smart contract development and execution platform. 
• Marlowe is a Cardona domain-specific language, and developers use it for financial contracts. 
• Gloaw is a domain-specific language used for writing dApps.

Also read: 9 Best Metaverse platforms everyone should know about

How to stake Cardano?

Some blockchains protocols allow participants to contribute to the network. Staking is a great way to earn passive income and support the stability of the network. If you want to know how to stake Cardano? It is quick and easy on most crypto exchanges. The procedure is as follows –

• Create an account on a reputable crypto exchange platform.
• Deposit Cardano crypto into your wallet on the exchange platform.
• Navigate to the staking page on the exchange platform and select Cardano. Most platforms give an option of selecting staking duration, indicating how long the Ada tokens will be locked. This is similar to a fixed deposit at a bank, and if you withdraw ADA before the period, you will not receive staking rewards. 
• Enter the amount of ADA tokens you want to stake and click on — Stake now.

Cardano use case

Cardano is a scalable blockchain with a rich set of features. The Cardano team’s goal has always been to solve real-world problems. 

• Cardano has given access to affordable banking services where financial access for citizens is not easy. Cardano has partnered with the Ethiopian Ministry of Education to prevent corruption and increase financial inclusion. 
• Cardano NFT offers a more environmentally friendly ecosystem with lower fees and quicker transactions. 
• Smart contracts paved the way for Cardano dApps. Today it has a major player in the decentralized application. Developers are working on different applications such as Defi Cardano, NFTs, games, MetaVerse, and governance.

How does Cardano work?

Cardano runs on the Ouroboros consensus protocol and was the first proof-of-stake blockchain. Ouroboros divides time into epoch-made-up slots. These slots are similar to working shifts. Currently one epoch last 5 days, and one slot last 1 second. Epochs work circularly, when one epoch ends, another one starts. Each slot has a leader chosen by lottery, the higher the stake better the chances of winning the lottery. Slot leaders look after –

• Validating transactions
• Creating transaction blocks
• Adding and creating new blocks.

Ouroboros requires some ADA holders to be online to maintain good network connectivity.

Also read: 8 best list of smart contract platforms

Cardano gas fees

Cardano gas fees or transaction fees include processing and long-term storage costs. Cardano fees are collected and distributed to all the pools created during an epoch. You can calculate the minimal fees by the formula –

a + b = size ; where a and b are constant, and size is the transaction in bytes. 

a = 0.155381 ADA

b = 0.00043946 ADA/byte.

This translates to 0.17 ADA or 0.91 USD.

Price of Cardano

The price of Cardano is updated daily and is currently $0.56. Cardano’s market cap is ranking 6, with a live market cap of $18,958,261,414. The current Cardano Euro price is 0.523 and Cardano USD price is 0.56 USD.

Polkadot vs Cardano

Both Polkadot and Cardano blockchain has seen rapidly in the last year.  Both cryptos are neck to neck in the market cap and are among the top ten cryptos. If we study the USP of Polkadot vs Cardano, Cardano has a double-layered architecture offering higher flexibility for smart contracts, while Polkadot connects individual blockchains into a single network. We will see a detailed Polkadot vs Cardino comparison in this section.

Polkadot technology vs Cardano technology

If we compare Polkadot technology vs Cardano technology,

Polkadot Technology	Cardano Technology
Polkadot is a network protocol, you can transfer arbitrary data across the blockchain.  It has a multi-chain application environment.	Cardano is a proof-of-stake blockchain.  It uses the algorithm Ouroboros protocol to mine chains. In the POS system staking determines the node’s capability to create blocks.

Polkadot token vs Cardano Token

The difference between Polkadot Token vs. Cardono Token is as follows,

Polkadot Token	Cardona Token
Polkadot token (DOT) has two main functions – governance token and used for stalking.	Cardona token ADA can be created and distributed on the blockchain and interact with smart contracts. Ada Token holder holds a stake in the network.
Polkadot DOT token has an unlimited supply.	Cardona’s ADA token has been capped at 45 billion.

Also read: Metamask vs. coinbase wallet | Best crypto wallet comparison

Polkadot Blockchain vs Cardano Blockchain

If we compare Polkadot Blockchain vs Cardano Blockchain

Polkadot Blockchain	Cardano Blockchain
Polkadot is an open-source blockchain platform and cryptocurrency. It allows interconnectivity and interoperability between blockchains.  The Polkadot network includes a main blockchain called relay chain and a user-created parallel chain called parachain.	Cardano is a third-generation blockchain platform.  It is an open-source, decentralized, proof-of-stake blockchain and is a flexible, sustainable, and scalable blockchain..

Polkadot Price vs Cardano Price

The difference between Polkadot Price vs Cardono Price is as follows –

• Cardano cryptocurrency has more equitable than the supply of Polkadot cryptocurrency.
• Cardano ADA is cheaper than the price of Polkadot DOT. Beginners prefer ADA.
• Cardano has a lower risk with penalties for investors and moderators. Polkadot is at a higher risk with its purchase.

Polkadot ecosystem vs Cardano ecosystem

If we compare the Polkadot vs Cardano ecosystem,                    

Polkadot works on the Parachain model and involves different blockchains working together. The Polkadot ecosystem has two components,

• Parachain is a specific and customized Layer-1 developed with Substrate blockchain. It has its economy, token, governance, and legacy Layer-1s. 
• Relay is the nucleus of Polkadot. It is the layer-0 chain housing validator and is responsible for securing, governing, and connecting the para chain.

Cardano ecosystem has a third-generation blockchain platform. It provides a secure, scalable, decentralized platform for enterprise-grade blockchain use cases. Key features of the Cardano ecosystem are,

• Ouroboros is a verifiable and secure blockchain protocol.
• Security is among the prominent feature. 
• Open-source architecture is the core feature of the Cardano ecosystem. It has incentivized participation. 
• Cardano Stock Exchange is a community-driven knowledge base of Cardano.

Also read: How to create erc20 token? | Step-by step guide

Polkadot layers vs. Cardano layers

The difference between Polkadot vs Cardono layers are as below,

Polkadot	Cardona
Polkadot has a single-layer blockchain. If chains like Ethereum. Solona and Polygon are layer 1platform. Polkadot is considered layer 0 that connects to layer 1.	Cardona blockchain is built on two layers – The settlement layer manages the movement of value(or currency) between sender and receiver. The computation layer replicates the Bitcoin smart contract platform.

FAQ on Polkadot Vs Cordano

Is Cardano a good investment in 2022?

The crypto market has been in a downtrend in 2022 because of the current political unstable climate. Cardano investors continue to be bullish. The company has announced it will implement three major upgrades this year. According to the business community, the Ada coin price will be consolidated and ranges between $0.3 support level and $1 support level. According to experts, Cardano prices will hit their maximum in August and trade at $1.51. The expected price growth is estimated to be 72% in 2021.

Will Cardano survive long term?

Experts feel Cardano has great potential of becoming profitable. Cardano has a strong technical foundation, and its strategy has helped Cardano Ada become one of the top cryptos in the world. For most investors Cardano’s predictions are bullish. Most hoodlers (crypto social network) believe that Cardanio’s future prices will overtake ATH.

Is Polkadot a good investment?

Yes, Polkadot is a good investment, and prices are expected to grow. In 2020, Polka crypto was the most profitable and trusted crypto. Polkadot prices fluctuated in 2021, but have been growing steadily since June 21. Experts predict the cost of 1 dot could reach $81.78.

Does Polkadot have a future?

According to Recent DOT crypto news, Polkadot is preparing for the parachain rollout stage. The cross-chain functionality that went live in May 2022 has set the tone for network expansion of native assets and tokens. Despite the recent downward price actions, investors remain bullish on DOT crypto pricing which has a long-term earning potential of 348.53%. Cardano prevision expects the token to be $7050 by 2023.