Shiba Inu (CRYPTO:SHIB) is the latest cryptocurrency to go viral. Despite falling 57% from its all-time high, its price has still surged a mind-boggling 65,600,000% since November 2020. At that pace, $1.53 invested in Shiba Inu at its all-time low would be worth $1 million today. That’s right; for less than it costs to buy a cup of coffee, some investors made a fortune.
That being said, don’t beat yourself up if you missed out. Betting on Shiba Inu would have been (and still is) similar to buying a lottery ticket. Its unprecedented gains were fueled by hype, including relentless social media campaigns that urged people to buy and hold. Cryptocurrency is already a volatile asset class, but mix in a little hype and some smart branding — Shiba Inu takes its name from the same meme as Dogecoin — and you have a recipe for explosive growth.
Unfortunately, Shiba Inu lacks actual utility. Despite being an ERC-20 token, a type of smart contract built on the Ethereum blockchain, Shiba Inu has not been widely integrated into decentralized applications (dApps) or decentralized finance (DeFi) products. And since there is nothing exceptional about it, I doubt that will change.
However, there are thousands of other cryptocurrencies out there, and many of them look like smart investments. Solana (CRYPTO:SOL)stands out from the pack. Here’s why.
An innovative blockchain
In 2015, the launch of Ethereum forever changed the cryptocurrency space. Rather than a mere digital ledger, the Ethereum blockchain is a programmable platform, meaning it can support self-executing computer programs (i.e. smart contracts). In turn, that technology evolved into dApps and DeFi products — software that functions outside the control of any third party.
In the context of DeFi, that means investors can trade, lend, and earn interest without involving a bank or brokerage. To that end, DeFi makes financial services more efficient. For instance, you could earn 5.95% APY by lending Tether — a stablecoin designed to track the value of the U.S. dollar — to the Aave protocol, a DeFi product that pays interest in exchange for liquidity. To put that figure in context, the average U.S. savings account currently pays 0.06% APY.
However, Ethereum currently handles just 30 transactions per second (TPS), meaning its throughput is far too low to support mainstream adoption. In fact, network congestion has already caused transaction times and fees to rise, because more people are competing for a limited number of resources (i.e. miners must verify all transactions, but they can only work as fast as the network permits).
Solana was created to overcome that barrier. Like Ethereum, the Solana blockchain is programmable, but thanks to its innovative …….