There are over 105 smart contract platforms, but this article is about the ones people are using the most to build dApps and DeFi protocols.
What are smart contract platforms?
Smart contract platforms are blockchains that enable developers to build decentralized applications (dApps).
These dApps run on their backend code called smart contracts, which are self-executing computer programs that use the blockchain to store their data.
Smart contracts enable two strangers at opposite ends of the earth to transact without the need of a trusted intermediary.
Furthermore, their use reduces transaction costs and increase transaction speed by an order of magnitude compared to traditional contracts.
In this post, I will be sharing with you the top 7 smart contract platforms based on usage, including their unique features, advantages, and disadvantages.
Top 7 smart contract platforms:
- Binance Smart Chain
- Huobi Eco Chain (Heco)
Ethereum is the first and most popular of all the smart contract platforms out there.
According to data from StateOfTheDapps, out of the 3,600+ total existing dApps across all smart contract platforms, 2,831 (79%) are on Ethereum.
However, Ethereum has become a victim of its own success.
Due to heavy usage and limited transaction processing capacity, the Ethereum network has become too slow and extremely expensive for the average user.
In order to address this problem of network congestion and high gas fees, Ethereum is migrating to what is called Ethereum 2.0.
Ethereum 2.0 is a Proof of Stake blockchain based on sharding technology that’s expected to give Ethereum more capacity to store and access data (i.e scale).
Advantages of Ethereum
- Has a stronger network effect due to being the first smart contract platform to exist. There are more users, developers, and dApps on Ethereum than all other smart contract platforms combined.
- Ethereum is known to be fully decentralized and secure, which is why most people continue to use it despite its exorbitant fees.
- It’s a multipurpose virtual machine. You can build practically anything you want on Ethereum, similar to the internet.
- Ethereum has the largest community of highly experienced and innovative developers. It is the preferred smart contract platform among most developers.
- Wide network of supporters. Ethereum is widely supported within and outside the cryptocurrency space. Institutions and even governments globally, leverage Ethereum’s technology to build next-generation digital projects.
Disadvantages of Ethereum
- Scalability. Ethereum cannot handle mass adoption in its current state. This is why the community is building and migrating to Ethereum 2.0.
- Very expensive. Transaction fees on Ethereum are too expensive for the average user. This is why other smart contract platforms such as Solana with negligible fees are seeing an increasing influx of new users.
- Inflation. Ethereum has an infinite supply with 18 million ETH being released into the market every year through mining. This will cause the price of ETH to fall or stagnate in the long run. Luckily Ethereum 2.0 will solve this problem by introducing a hard cap and constant burning of part of the network transaction fees.
- Uncertain future. Ethereum is walking uncharted waters with its full migration from Proof of Work to a Proof of Stake blockchain via Ethereum 2.0, something that’s never been done before. Will it fail or will it succeed? We can only trust Ethereum’s bright community of developers to deliver on the promises of Ethereum 2.0.
If there’s going to be any “Ethereum killer”, then Solana is the number one candidate.
Solana is a highly performant smart contract platform that offer users extremely fast transaction and neglible fees (as low as $0.00025).
The blockchain network is capable of processing up to 710,000 transactions per second TPS with 400 millisecond block times.
Solana mainnet was launched in March 2020 and has become one of the fastest-growing ecosystem in crypto.
Over 400+ projects (and growing fast) are currently building on Solana with billions of dollars worth of TVL.
Advantages of Solana
- Solana elegantly solves the infamous blockchain trilemma problem of security, decentralization, and scalability by possessing all of these features. Whereas most smart contract platforms sacrifice one or more of these to achieve scalability and low fees, Solana makes no compromises.
- Built from the ground up. Most, if not all other smart contract platforms are Ethereum forks, but not Solana. Solana is a custom-built blockchain built from scratch and fully optimized for security, decentralization, and scalability with negligible fees.
- Solana is everything Ethereum 2.0 wants to be plus more and it works right now.
- While other smart contract platforms use sharding, side chains, layer 2 and other complicated stuff to achieve scalability and low fees, Solana has everything working on a single layer (layer 1 ) blockchain.
- Solana can process up to 710,000 TPS, with 400 milliseconds block time, and negligible fees.
- Solana code was designed to be lean and clean, allowing the nodes’ hardware to operate at full capacity. It is the only chain that scales naturally with bandwidth, SSDs, and GPU cores.
- Solana is secured by 900+ (and growing fast) validator nodes.
Disadvantages of Solana
- Solana is not Ethereum compatible. You cannot easily port existing Ethereum dApps to Solana. If you want to come to Solana, you have to build from scratch, relying only on provided developer resources.
- Still young and hasn’t stood the test of time.
- Most projects on Solana are still closed-source and utterly centralized. These makes it easy for developers to pull the rug on users.
- Much of the Solana chain development is being done by Solana Labs and a significant portion of the SOL coin is in the hands of institutional investors funding Solana Labs and the team. On these notes, many consider Solana to be somewhat centralized.
3. Binance Smart Chain (BSC)
The Binance Smart Chain (BSC) is a smart contract platform that was built by Binance and launched in September 2020.
BSC is a clone of the Ethereum blockchain with some modifications.
Thus Ethereum-compatible and existing Ethereum-based dApps can be easily ported to BSC to enjoy fast transaction and low fees.
BSC is reasonably fast woith 3 second block confirmation time.
Transaction fees are equally low (as low as $0.049818), compared to Ethereum.
The network is secured via a modified Proof of Stake (PoS) consensus mechanism called Proof of Staked Authority (PoSA) with 25 validators nodes.
The majority of these validators are said to be controlled by Binance and their cronies.
Thus if Binance were to have a second thought today, they could successfully execute a 51% attack and rollback transactions on the BSC network.
Of course, this is only a possibility that you should know about, and not that Binance will do such a thing in the future.
Launched in September 2020, BSC has quickly risen to become the second-largest smart contract platform, just behind Ethereum.
At some point in February 2021, BSC surppoassed Ethereum in terms of daily transactions and number of users.
Advantages of BSC
- BSC is fat with a 3 second block confirmation time.
- Transaction fees are lower on BSC (under $1), especially compared to Etheruem. It’s higher than other smart contract platforms discussed here though.
- A strong and fast-growing network effect, thanks to the large and more established Binance community and ecosystem that backs it up.
- Binance strongly supports projects building on BSC. Which has contributed to the network’s quick growth.
- BSC is dynamic and proactive to network upgrades and fees adjustments as network usage increase to avoid unbearable congestion and gas fees.
- You can easily move funds from and to BSC via Binance Exchange.
Disadvantages of BSC
- BSC is mostly centralized with Binance having tight control of the chain.
- BSC fees and speed also fluctuates with network usage. During peak periods things can easily get ugly for users on BSC.
4. Huobi Eco Chain (Heco)
Heco Chain is an Ethereum-compatible smart contract platform developed by the Huobi Exchange.
It too is considered to be quasi-decentralized like BSC, as most of the validator nodes on the network are controlled by Huobi.
However, with an average transaction fee of $0.001, it’s 10x cheaper to do business on Heco Chain than on BSC.
Heco Chain can over 500 transactions per second and has a 3second block confirmation time. Making equally as fast as BSC.
Advantages of Heco Chain
- You can easily move funds from and to Heco Chain via Huobi Exchange.
- Transaction fees on the Heco Chain are extremely low.
- Heco Chain is fairly fast and highly scalable.
- Heco Chain is compatible with Ethereum. Developers can easily port their dApps from Ethereum to Heco with little to no modifications required and enjoy low fees and fast transactions.
Disadvantages of Heco Chain
- Heco Chain is somewhat centralized as most of the validators are controlled by Huobi Exchange.
- There’re fewer dApps currently on Heco Chain. Though many more are being developed as the market matures.
Polkadot is a blockchain protocol that allows any type of data to be transferred across blockchains on its network.
It aims to become the new internet of blockchains, forming a wide network of blockchains that interoperate and communicate seamlessly with one another.
Any public or private blockchain can connect to Polkadot and enjoy instant interoperability with other connected chains.
Polkadot’s main idea is the unification of multiple specialized chains into one highly scalable, interconnected network.
Blockchain projects would not have to compete with each other anymore, as they can now work together in the Polkadot network to provide users complete independence from the centralized world.
Advantages of Polkadot
- Polkadot parachains run and produce their blocks in parallel which greatly amplifies the speed of the network.
- While most blockchains are most efficient at one or a few things, with Polkadot it’s easy to deploy all kinds of parachains (independent blockchains) to service every need. Putting Polkadot in a situation where it would most likely be the only blockchain network that’s good at everything.
- Just as your body parts are connected to each other via your central nervous system, all blockchains on the Polkadot network are similarly connected and can communicate and share data among themselves seamlessly.
- Creating and deploying parachains is super easy with its simple SDK (software development kit) called Substrate. You don’t have to code from scratch when building on Polkadot.
- Polkadot is forkless. The blockchain can be upgraded to add new features or fix bugs without having to hard-fork it. Thus allowing the network to be gradually perfected with time and without any potential chain split.
- Upon its full upgrade, Polkadot is capable of processing 166,666 TPS with a theoretical limit of 1 million TPS. However, in its current state, it can only handle 1000 to 3000 TPS.
- Blockchains connected to the Polkadot network automatically enjoy its shared security. They do not have to worry about attracting enough validators or miners to secure their chains.
Disadvantages of Polkadot
- Most of Polkadot capabilities right now are promises and projections. Most of the core technologies are still in development.
- Polkadot has been exploited by hackers twice already, leading to the loss of millions of dollars worth of users assets. Talk about security.
Avalanche was founded in 2018 and launched its mainnet in September of 2020.
The smart contract platform claims to be the fastest among its peers in terms of time-to-finality.
Avalanche is built with three interoperable blockchains:
- Exchange Chain (X-Chain), which is used for the creation of new digital assets.
- Contract Chain (C-Chain), which is is Avalanche’s Ethereum Virtual Machine (EVM) implementation.
- Platform Chain (P-Chain), which is is used for coordinating validators and creating subnets
By splitting its architecture across three separate blockchains, Avalanche is able to optimize for flexibility, speed, and security, without any trade-offs.
Thus making it a powerful smart contract platform for both public and enterprise use cases since developers have a great deal of flexibility in the types of applications they can build on it.
Furthermore, similar to most other smart contract platforms on this list, Avalanche is fully compatible with Ethereum assets, apps, and tools.
This means that dApps from Ethereum can be easily migrated to Avalanche to benefit from more users, cheaper gas fees, faster transactions with little to no further development work.
Advantages of Avalanche
- Has one of the largest numbers of validators (over 1,038+) validators securing the network with the capacity to scale to millions of validators.
- Avalanche network achieves consensus and transaction finality within less than a second.
- All transaction fees on Avalanche are burned (destroyed) forever, accelerating the rate of deflation as network usage increases.
- Similar to Polkadot, Avalanche is a platform of platforms, that supports other blockchains being built on top of it.
- Avalanche can process up to 4,500 transactions per second per subnet with the ability to scale to an unlimited number of subnets and increase its performance accordingly.
- Similar to Solana, Avalanche has been able to achieve decentralization, scalability, security, low transaction fees, and fast transaction confirmation time all in a single layer blockchain.
- Avalanche is highly customizable, enabling developers to build anything and new functionalities into their dApps seamlessly.
- Unlike other proof of stake blockchains that punish validators who defaults on acts maliciously by slashing their staked coins, Avalanche simply excludes them from the rewards instead of taking their coins.
- Avalanche has a capped supply, multiple token use cases, burns all transaction fees on the network, and other interesting tokenomics. Making it very attractive for investment especially if the network is able to attract more developers and users.
Disadvantages of Avalanche
- Avalanche is untested and unproven.
- The platform developed bugs earlier in February 2021 as a result of unusually high network usage. It’s already having volume-related bottlenecks even with a relatively insignificant volume.
Polygon is a layer two (l2) smart contract platform that was established in 2017 and became operational in 2020.
Its main aim is to complement and help Ethereum scale by taking the workload off of the congested, slow, and expensive Ethereum main chain.
Existing dApps on Ethereum can be easily ported to Polygon to enjoy negligible fees and extremely fast transactions.
Furthermore, Polygon achieved its scalability, low fees, and fast transactions without sacrificing the security and decentralization of Ethereum.
The native cryptocurrency that’s used to pay for transaction fees on the Polygon Network is called MATIC.
Advantages of Polygon
- Polygon is able to benefit from Ethereum huge network effects which have contributed to its rapid growth with over 400 dApps already building on it and billions of dollars in TVL.
- Transaction fees on Polygon are as low as $ 0.0000000210.
- Polygon can process up to 65,000 transactions per second. Making it as fast as the likes of Solana and Avalanche.
- Polygon is also a blockchain of blockchains. It is a network protocol for building and connecting to Ethereum-compatible blockchains, similar to Polkadot, Cosmos, and Avalanche.
Disadvantages of Polygon
- Polygon has suffered a network rollback twice already. Talk about security.
- Layer 2 solutions like Polygon may become irrelevant once Ethereum is able to solve its scalability problem. They will have to evolve or die.
Ethereum scaling problem stems from the fact that every node on the network has to process all transactions one by one to ensure security.
This consumes a lot of time and wastes computing resources, leading to network congestion, slow, and expensive transactions, etc. all of which Ethereum is known for.
Ethereum scalability problems and failures have given birth to several other smart contract platforms supposedly better.
However, I don’t think any of them will “kill” Ethereum.
They can all survive and thrive together because, in reality, no single blockchain can serve all purposes efficiently.
Some are better suited for or more purposes than others and it doesn’t hurt to give developers and users alternatives to choose from.
Furthermore, the competition among these smart contract platforms will lead to constant innovation which is good for the industry.
Which is your favourite smart contract platform? Share with us in the comments section below.