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Cosmos (ATOM) vs Solana (SOL): Which Is The Better Investment?

Cosmos and Solana strive to make things in the decentralized cryptoverse faster, easier, and practical. Cosmos was conceived in 2014; Solana is a younger project with a technical birth in 2020. These projects strive to innovate Dapps, blockchains, and scalability as well as offer solutions to many problems in the crypto space.

Solana has more potential for swing trading profits in the short term, while Cosmos could be the future of blockchain interoperability, rendering it extra advantageous for the long run.

In this crypto-power session, I will weigh each of these coins against each other to uncover the similarities and differences that make them stand out. I will also express my personal opinion of which is the better investment, so stick around…

BTW: If you need a complete strategy for investing and trading Bitcoin or Ethereum, you need to check out these two articles:

My Personal Bitcoin Investing & Trading Strategy

Ethereum Trading And Investing Strategy – What I Personally Do

What Are Cosmos And Solana?

Cosmos is deemed “the internet of blockchains.”  ATOM is the acronym for their coin and there is a finite supply. They are a project that works on speeding up transactions, lowering fees, and allowing for larger scalability. They aim to make it as easy as 1, 2, 3 for blockchain creators.

It’s Cosmos’s mission to simplify and connect blockchain technology, helping developers by taking out the mystery of decentralized apps. They believe that interoperability amongst co-existing blockchains is essential to a free crypto world so there won’t be a reliance on only one block.

Solana is a cryptocurrency and a platform that is designed to run decentralized apps. SOL (their native token) is used to pay staking transaction fees as well as can be used as a peer-to-peer digital value. Several exchanges like Coinbase and Binance sell SOL tokens.

With new hybrid consensus methods, Solana pushes to spread decentralized finance to the world with functioning scalability that overperforms. Solana endeavors to keep transactions extremely fast, which in turn lowers congestion and keeps fees low. It is a large task to compete with centralized companies like VISA, but they are up for the challenge!

How Are Cosmos And Solana Similar?

  • DAPPS. Each project focuses on bringing less complicated decentralized apps to the world.
  • MULTI-USE. They are both cryptocurrencies and utility tokens with a multi-use case.
  • FINITE SUPPLY. ATOM has a supply cap of 260,906,513 and SOL caps at 489,000,000.
  • SCALABILITY. Both projects concentrate on mass adoption with a congesting prevention system.

How Are Cosmos And Solana Different?

  • CONSENSUS. Solana uses a hybrid consensus: proof of history(PoH) combined with proof of stake; Cosmos only uses proof of stake (PoS). 
  • INTEROPERABILITY. Cosmos uses interblockchain protocol to help networks communicate with each other while Solana does not have that ability.
  • DECENTRALIZATION. Although Solana processes more transactions per second, and have lower fees, it pays for this in the decentralizatino of the consensus mechanism used to achevie it. Basically, Cosmos is more decentralized than Solana.
  • SPEED. Although both aim for rapid transactions, Solana is the winner: 50,000-65,000 per second.

Tokenomics And Price History Of Cosmos And Solana:

These two decentralized loving adversaries are worth looking into, especially when it comes to the details of their percentage gains over time. Both ATOM and SOL have made huge leaps on the charts over their time. Let’s look at a couple of charts:

Solana Historical Performance:

First off, let’s look at the historical returns of Solana, going back to May 2020:

Jepp, that’s a 30,000 + percent gain in 17 months – wow! If you invested $1500 in Solana in May of 2020, you would have roughly $450,000 today!

To get the full picture, we’re also going to look at the historical corrections to get an idea of how Solana performs when the going gets rough:

Solana corrections

We see that the first correction was over 70%, and the second one was almost 50%. The average of these two corrections is 60.7%.

Now, let’s compare this to Cosmos!

Cosmos Historical Performance:

First off, let’s look at the historical returns of Cosmos, again, going back to May 2020:

Cosmos historical returns

Cosmos “only” surges with ca. 1400% in the same timeframe that Solana surges with 30,000%. This round clearly goes to Solana.

However, let’s also look at the corrections that Cosmos have seen:

cosmos correction

The first one was “only” 47% while the other one was 65.6%. This averages out to 56.3% which is lower than what Solana showed. Still though, the crazy high returns are worth the extra deep corrections.

Historically speaking, Solana is WAY better than Cosmos, but this does not guarantee that it will continue to be. Remember, Solana is much younger than Cosmos and consequently had much more room to grow. Therefore, this comparison is not fair… But still, Solana has outdone the “old one” by a factor of 20!

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Forward-thinking and effective management of a project is crucial for its success. Well thought out Inflation strategies from the get-go will help paint the future of a project.

Spanning from 2020 to 2031, Solana has an initial inflation rate of 8% which descends yearly into a long-term outlook of 1.5%. Click this link for a more in-depth look at Solana Tokenomics.

According to Start It Up, Cosmos has high inflation rates between 7-20% in order to incentivize its user into staking their tokens. Targets of staking overall reside around the 66% range and inflation rates will raise/lower accordingly to encourage holders to contribute.

BTW, you might want to check out this article as well: Cosmos (ATOM) vs Algorand (ALGO): Which Is The Better Investment?

Or maybe this one: Cosmos (ATOM) vs Cardano (ADA): Which Is The Better Investment?

There are numerous other factors to consider, but I’ve covered enough to speculate on the…

Future Outlook For Cosmos And Solana:

Solana Solana, where art thou Solana? They are here and they are using a timestamp proof of history system that can support 65,000 transactions a second!

BUT, at its full potential, mathematically speaking it is possible to support up to 710,000 transactions a second! That blows VISA (65,000) out of the water by 7X. I hope to see a bright future for Solana and its holders.

Cosmos could be what connects all the blockchain together ultimately, literally. With their protocol, consensus, and development kits, they enable globalized interoperability that can allow easy-to-build blockchains that are made for users and governed by users.

With how they are uniting blockchains, apps, and services, the future mass adoption of decentralized finance could be realized through them. 

It’s also important to know that, at least at the time of writing, Solana is five times more expensive than Cosmos, giving Cosmos much more room to grow.

Both have their edge and are in place to become a sustaining part of the cryptoverse. However, Solana has a little more risk with potentially larger returns than Cosmos, who is a more settled contender with a slow and steady projection ahead of it.

Either way, I see long-lasting decentralized goodness in the future.

Conclusions: Cosmos Is (barely) The Winner

Cosmos and Solana are innovative, dynamic, and are both good investments focused on the benefits of blockchain. I believe they each have their place in the market, especially for developers and their respective DAPPS.

Cosmos goes beyond just enabling technology to allow blockchains to share and communicate with one another; it opens up the crypto doors for developers to build their own blocks chains in a fraction of the time it typically takes traditionally.

In addition, they have executable plans to keep the expansion process environmentally friendly whilst doing so.

Solana, the late but great contender shines pretty brightly with its lightning transaction speeds and cause-effect low fee results. They are a great competitor against the conventional centralized financial system, and I would LOVE to see them win the battle!

A large amount of institutional money has been invested in Solana. What does that mean? I think it means there is a future in Solana. However, there is a chance that another fundamental trend is in place, so I like to pay close attention…a good rule of thumb, follow the big money – swim with the whales. 

Which one’s a better investment?

In my crypto opinion, I would have to go with SOL for immediate short-term gains as a way to gather more funds for long-term alt-coins like ATOM.

In terms of technology, which is the better blockchain? I would go with Cosmos here:

They are one of the few projects making leaps and bounds, interconnecting blockchains for the pure progression of crypto. If the centralized world taught us anything, it is that is it far better to co-exist and never rely on solely one source. If Cosmos hold their end of the bargain up, things could be lucrative and sound as time goes on.

In short, Solana has a more explosive price record; but Cosmos has more research and development years under its belt. They could become the hub of the ecosystem. When I put my long-term (several years) investor hat on, I put my bets on Cosmos.

Will I be investing in both? Absolutely. It is always good to spread your risks.

With that, I say goodbye for now and see you in the Cosmos!

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