Smart contracts have revolutionized the decentralized finance system. Each day a more secure and efficient platform makes the headlines with a new set of protocols. The Ethereum ecosystem has managed to dominate the crypto market despite the high gas fee and relatively slower transaction process.
Currently, there are no alternatives for GWei while trading on Ethereum blockchain while other cryptocurrencies offer cheaper alternatives opening up many opportunities for other layer-one smart contract platforms. The probability of crypto consumer turnover from Ethereum is increasing as the users now prefer to look for better alternatives, making the cryptomarket more competitive coupled with greater investment opportunities.
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What is a Smart Contract?
Smart contracts, as the name implies, are self-executable coded agreements between buyers and sellers trading on a blockchain platform. Each smart contract is created in its respective coding language. The developers define conditions for the automatic execution of the smart contracts.
Smart contract represents a distribution of node networks on a blockchain platform. A node is a computer server connected to the blockchain network. The data being exchanged between the nodes is stored in the form of blockchain. The data contains information regarding transactions executed between the nodes provided that it fulfills the refunding, borrowing, lending terms as per the contract.
The transaction between nodes cannot be executed if the agreement terms defined by the smart contract are not fulfilled. A major attribute that makes smart contracts an excellent replacement for traditional financing techniques is transparency and unchangeability due to their specific consensus model, such as Proof-of-work (PoW) or Proof-of-stake (PoS).
Here is a list of top smart contract platforms for 2022:
Solana reaches the benchmark of top smart contracts because of its speed and low transaction fee. The decentralized blockchain platform of Solana has caught the attention of cryptographers, investors, and developers due to the 400 percent growth rate of its market capitalization value as of 2021. Currently, the market cap value for Solana is $33.4B.
Solana has very high scalability as this decentralized blockchain platform can smoothly operate 50,000 transactions per second. So it is safe to claim that Solana has the potential to give tough competition to Ethereum in 2022.
The reason why this blockchain technology is better is because of Solana’s resistance to censorship, allowing nodes in the blockchain network to run the smart contract within its single-layer system, which makes Solana an appropriate choice for micropayments.
One reason this smart contract platform is spreading like wildfire is because of low and static transaction fees. The unique selling proposition is its low gas fee of $0.00025, giving it an edge over Ethereum because the gas fee for ETH varies with the nature of transaction.
So, there is a lot of hype around the nominal costs and speedy transfers. The transfer speed is determined by the transaction rate which is 3,056 transactions per second, on average for Solana. The blockchain caught attention for its unique transaction protocols i.e. proof-of-history (PoH)– the assigned slot to the data on the blockchain and production of a new block in the blockchain is embedded in the blockchain code.
How PoH differs from PoS?
This transaction protocol enables quick transactions, which gives Solana an innovative edge over Ethereum. The data storage in the blockchain is in chronological order through verifiable delay function (VDF) and with PoH the transfer history retrieval and verification an easily accessible feature in Solana.
The waiting period for transactions increases as the number of nodes increase in the network resulting in mempool issues or network congestion. Solana eliminates the mempool issues through its high scalability rate, allowing safe and instant transfers across the blockchain network with negligible waiting period.
Another advantage of this blockchain network is the programming languages: C++, C, and Rust. This shows potential prospects of the Solana ecosystem because Rust is used by developers. Solana particularly incentivizes game developers by providing low transfer fee and fast speed to deploy Dapps on the blockchain.
Moreover, the Turbine protocol has solved bandwidth issues that other platforms face. Solana doesn’t have any transmission issues among users, which is why the market capitalization is increasing drastically to nearly $50 billion.
Polkadot is wildly popular after a price surge due to its unique projects built on the relay chain system. This isn’t a smart contract platform but it aims to improve crypto usability by its parallel chains (parachains). The multi-chain network allows up to 1,000,000 transactions per second on the blockchain platform.
Parachains have been beneficial to the decentralized finance community. They function together without exhausting the resources available on the blockchain.
Crypto loans can make life much easier. This is because there are no interest rates. Polkadot aims to use invoices and other tokens as collateral for loans. It is an interesting take on DeFi projects that shows exponential potential.
This is all possible because the creators of the Polkadot blockchain have developed a layer zero solution. This interoperability and compatibility of the Polkadot network on the Ethereum protocol is possible because of the set of predefined rules or practices incorporated in the smart contract utilized by the nodes on the Ethereum network.
These protocols maintain connectivity among thousands of nodes exchanging data through parachains. Polkadot’s distributed ledger provides developers a greater control over the overall function of the blockchain network.
Concerned parties of the PolkaDot blockchain network can view and track their crypto assets with ease because of easier transactions between the parachains, making it a promising factor for interoperability. The ease of data exchange in Polkadot makes it a creativity-driven smart contract platform.
Polkadot’s method of verification relies on proof of staking (PoS) consensus mechanism. In order words, this ledger system rewards the nodes with a complementary block on the blockchain, after a successful transaction. A small percentage of transaction fees charged to each node on the blockchain as an incentive. But a bigger share can be collected after staking tokens into pools.
Avalanche blockchain has outperformed many leading smart contract platforms. Crypto enthusiasts such as Ed Chang believe it is an effectively growing decentralized currency. This is because you need to own at least 80% of the AVAX token to make a dent in its market cap. It can easily survive any whale dumping all their coins at once.
Thus, it has grown in popularity over other ecosystems. This is because fast transactions are possible without compromising on security and decentralization in the Avalanche blockchain.
Many developers are attracted to the flexibility and control over apps because of the three builtin blockchain architecture. In this three-chain architecture, the exchange chain, platform chain, and contract chain are regulated by a primary network. It allows them to experiment more and create Dapps bigger and better.
Avalanche combines classical and Nakamoto blockchain development protocol into a distinctive record-keeping consensus mechanism that eliminates redundancy of data and accomplishes necessary contracts effectively. This unique consensus mechanism gives Avalanche an edge over other blockchains.
All the advantages of the two systems along with EVM compatibility is a cherry on top. It puts the smart contract ahead of the game without sacrificing decentralization. This is because it has a fast processing speed of 4,500 TPS compared to Ethereum’s 13 TPS.
One major benefit for developers is launching Dapps from Ethereum at a low cost because of EVM compatibility. So, it attracts a lot of innovation, as they can code in their desired programming language. Therefore, writing smart contracts is easier and affordable than other platforms. There is no need to buy specialized hardware or software to be part of the blockchain network.
Binance Smart Chain
BSC smart contracts were popular from the get-go. This is because it was 12 times cheaper and quicker than Ethereum. The reason it managed lower fees was a larger capacity (scalability) for Dapps to run smoothly. Other blockchains had a limited space, which led to a surge in transaction fees.
Moreover, the interoperability due to the dual-chain architecture helps communicate better. This makes BSC second to Ethereum because it bridges the gap between BEP20 and ERC20 blockchain. It allows easy transfer of a variety of tokens.
Binance Smart Chain incorporates Delegated Proof of Stake consensus mechanism, the nodes are called validators because they also validate the generation of the new blocks in the blockchain.
This entire ecosystem can handle transactions at a relatively lower transaction fee, currently 0.3389 USD/tx. The transaction fee in Bianance Smart Chain depends on the two types of transaction i.e. BNB and Binan DEX. The variations in the transaction fees are almost negligible and are 20 times lower than the ERC20 blockchain. Allowing developers to focus more on innovation without worrying about the gas fees.
Moreover, another reason for it performing better than other smart contract platforms is because it also utilizes proof-of-staked authority. The consensus mechanism allows quicker processing, as a new block is read every 3 seconds. So, it provides a high-speed infrastructure for DeFi developers.
After exploring the best smart contract platforms, EOS has proved it deserves to be at the top. It has a horizontal scaling protocol that provides a secure ledger to users to interact with Dapps on the blockchain network. The transaction process is highly efficient because it promotes scalability, the network is specially designed to run business applications or Dapps.
EOS blockchain has the capacity to allow 3,000 transactions per second. The reason for quick transfer of data between the nodes using DPoS as its consensus protocol. The stakeholders vote for block producers with a simple yes or no voting system.
Moreover, the best part of this ecosystem is it requires no fee for receiving or sending EOS tokens, making it a direct competitor of Ethereum. The blockchain uses RAM storage, CPU power and network bandwidth to transfer EOS tokens. However, different exchanges or swaps may have a small withdrawal fee of 0.1 EOS.
This is one factor that developers love when it comes to creating new high-performing Dapps. Even though EOS is in its early days, it has a promising future. The blockchain platform can give stiff competition to Ethereum because of its no gas fee policy.
The decision is within your hands with many smart contract options to nitpick from. It may be difficult but educating yourself can help make the right choice. So, do a little research before you invest. This is because there are many promising projects about to be released in 2022.
The more you know about different consensus mechanisms, protocols, and conditions the better your decision will be!