Best Ethereum Alternatives (2024): Annoyed By Crazy Expensive Gas Fees?

Although the Ethereum blockchain remains the most popular platform among dApps developers, it still has some serious drawbacks. 

High transaction fees and the lack of scalability are, perhaps, the key obstacles preventing its further adoption.

Buterin’s team slowly but steadily moves on toward Ethereum 2.0. The upgrade should resolve many of the current problems including high network fees.

Yet, the release date is still unknown. At this, the question about Ethereum alternatives is as acute as ever.

In this article, we will review some of the best Ethereum competitors that have been released up to date.

Why Do We Need Ethereum Alternatives?

With its whitepaper published in 2014, Ethereum became a real breakthrough solution of its kind. 

Its key innovation, i.e. smart contracts, provided developers with many new possibilities. At this, Ethereum made it possible to create fully functional decentralized applications with immutable transactions and 100% uptime.

Yet, the ICO craze that captured the attention of many investors in 2017 revealed a few serious deficiencies that the new system possessed.

The lack of scalability

As dApps surged in popularity, Ethereum experienced an enormous growth in transaction volume. 

With an average network throughput of 15-30 transactions per second, the network inevitably got congested. This resulted in high transaction fees and slow confirmation times.

At the time of writing, Ethereum Foundation together with other companies that run the decentralized network has found a solution to this problem. At this, the project aims to implement ZK rollups, sharding, and a few other methods in Ethereum 2.0.

Yet, at the time of writing, the system still experiences scalability issues while the ETA of the improvements still lingers in the dark.

High transaction costs

When it comes to defining the network fees, Ethereum relies on auction-based principles. The higher gas fees you specify, the higher the chances of your transaction being processed.

This technical peculiarity resulted in the so-called gas wars during high network congestion. In the worst times, the gas fees spiked to $60-70 per transaction. 

During 2022, transaction fees hovered around $5. This is surely much better, but still, it’s just highway robbery and not a path toward mass adoption of decentralized finance (DeFi) solutions.

BitInfoCharts: during the gas wars, ETH network fees can be pretty high

Centralization fears

While Ethereum was running on the proof-of-work consensus mechanism, it was prone to centralization problems.

With the ever-growing mining complexity, node holders required more powerful equipment which led to larger players dominating the market.

Luckily, these problems are not relevant for Ethereum anymore. 

As the network has finally completed the transition to PoS (proof of stake), the chances of a 51% attack have drastically decreased. The cost of such an attack would be too high making the whole action useless.

Inflation

With new coins being minted every few seconds, Ethereum is subject to high inflation rates. The lack of a defined maximum token supply makes things even worse.

The network continues burning around 1k ethers every year. But the process is not automated, hence, it doesn’t solve the problem.

Complex programming language

Ethereum features Solidity as the primary programming language for its smart contracts. The language is famous for its high complexity which often results in code errors and, eventually, vulnerabilities.

Yet, one can hardly find an Ethereum competitor that would use anything less complicated. 

In fact, the overall novelty of blockchain technology makes the majority of blockchain creators invent new programming languages. Thus, we can only hope for the release of better technical documentation in the upcoming years.

Ethereum competition 2022-2023

The problems mentioned above stimulated blockchain developers to search for Ethereum alternatives. 

Below, we have listed some of the best Ethereum competitors together with their perks and key features that help to solve Ethereum’s issues.

PulseChain

Launched as a fork of Ethereum, PulseChain represents one of the most viable competitors to the source network.

Here are some of its key features.

• Based on the proof of stake consensus mechanism. This solution promises to be energy-efficient and eliminates the potential gas wars among its users.
• Faster block times. With Ethereum, it takes 12 seconds on average to create a new block. PulseChain needs 10 seconds for that which increases its throughput capabilities.
• Deflationary system. PulseChain validators have the ability to choose to 'buy and burn' a portion of their revenue to decrease the circulating supply.
• Interoperable with Ethereum. PulseChain represents a hard fork of Ethereum. It means that its blockchain network is fully compatible with all Ethereum-based solutions.
• Airdrop for ETH holders. Finally, since PulseChain was a full system state copy, all tokens on Ethereum were airdropped on PulseChain.

Binance Smart Chain

Launched in parallel with Binance Chain, BSC represents a separate independent network. With the initial goal of solving the scalability problem, the system comes with the following features.

• Based on the PoSA. BSC runs on the consensus algorithm called proof of stake authority, or shortly PoSA. This is a modification of PoS that implies a set of validators to act as authorities supporting the network.
• Fast and scalable. BSC produces new blocks every 3 seconds. At this, it can process a few thousand transactions per second (TPS) with a pretty moderate transaction fee (2-4 cents on average).
• EVM-compatible. BSC is fully compatible with Ethereum Virtual Machine which facilitates the migration process for all participants of the network. At this, users can store BSC tokens on Metamask and other Ethereum wallets without having to move away to other solutions.
• Highly centralized. This is, perhaps, one of BSC’s key disadvantages. Fuelled by BNB tokens, the blockchain features their high concentration on a small handful of wallets. Besides, the success of the network strongly depends on its father project Binance, one of the top centralized exchange platforms that have ever existed up to date.

Polkadot

Polkadot’s history takes root in 2016 when Ethereum’s co-founder Gavin Woods published its white paper for the first time. 

Prior to the ICO boom that took place in 2017, Woods foresaw problems with interoperability that Ethereum was inevitably going to face. At this, he has invented a new blockchain to address this question.

• Interoperable. Polkadot was one of the first blockchain projects to use bridges for connecting different chains. Thus, the network can easily communicate with Ethereum and other chains.
• Scalable. Polkadot relies on a sharded peer-to-peer network architecture. It consists of two key parts. First, there is a relay chain that acts as a central hub. Second, the network features a large number of smaller parachains that validate transactions in parallel and send them to the relay chain. Thus, Polkadot can process many activities at the same time without giving up speed and resources. 
• Low fees. Polkadot gives a detailed explanation of how to calculate its transaction fees. It turns out that the final fee that users have to pay is much more moderate than on Ethereum.
• Decentralized. There are about 1,000 validators in the Polkadot blockchain which is not too much in comparison with some other projects. Polkadot plans to increase their number over time to improve its security, though. Besides, validators are not the only stakers supporting the network. Holders of the native token DOT are also welcome to contribute to Polkadot’s stability.

Polygon

Previously known as Matic Network, Polygon has been created to address the scalability problem of Ethereum. 

The project has built an EVM-compatible network based on several second-layer solutions that Ethereum is only planning to add. At this, it features Plasma, zkRollups, and Optimistic Rollups to increase its throughput indices and reduce fees.

• Compatible with Ethereum. Designed as an Ethereum scaling solution, Polygon is fully compatible with EVM. At this, developers can rely on the same tools and services when creating decentralized applications.
• Fast and scalable. Thanks to second-layer solutions, Polygon can offload transactions to the side chains contributing to their speed. Transaction costs, at the same time, are negligible.
• Modularity. Thanks to the modular structure, Polygon can be customized to developers’ needs without affecting the main chain. This makes the network highly flexible.
• Less decentralized. As a DPoS-based system, Polygon relies on 100 network validators which makes it less decentralized than Ethereum. While the number of validators is still high, the chances of their collusion are not equal to zero.

Avalanche

Ava Labs is the company that stands behind Avalanche creation. 

It issued the white paper on the new solution in 2018. The mainnet came out 2 years later aiming to conquer Ethereum in terms of scalability and interoperability.

• Unique consensus protocol. Instead of utilizing PoS or any of its variations, Avalanche has invented its own DAG-optimized consensus mechanism. It requires nodes to vote on proposed transactions or blocks by choosing from a large number of randomly selected validators. Since only a small number of nodes need to participate in the voting process, the network operates in a fast and scalable way. At this, Avalanche can process thousands of transactions per second at pretty low fees.
• Interoperable. Avalanche can operate with other networks with the help of bridge chains. It can seamlessly exchange digital assets and data with Ethereum and other networks.
• Inflationary token. The fixed supply of AVAX equals 720 million tokens. Avalanche doesn’t have any mechanism in place to reduce the supply of AVAX over time. Yet, the network features the automatic burning of transaction fees which helps to hold back inflation to some extent.
• Decentralized system. Avalance relies on more than 1,000 network validators who make the system decentralized and secure.

Cardano

Similar to other Ethereum alternatives, Cardano has been created with scalability and interoperability in mind.

An interesting fact is that Charles Hoskinson, Cardano’s founder, was also one of the first participants in the Ethereum project. Having launched his brainchild in 2017, he has managed to attain the following features.

• Layered architecture. Cardano blockchain contains two key layers. The Cardano Settlement Layer is responsible for managing transactions, smart contracts, and wallet balances. The Cardano Computation Layer, in turn, handles applications. As these layers can work independently from one another, this approach contributes to blockchain scalability. 
• Limited transaction throughput. Cardano can handle around 250 TPS at the maximum which surely cannot meet the ever-growing market demand.
• Consensus protocol. Cardano develops its own version of a PoS-based protocol called Ouroboros. The protocol requires a set of validators to manage the network and validate transactions.
• Decentralization. The blockchain platform features around 3,000 validators also known as stake pools. The number is sufficient to call the network decentralized and secure.
• NFT Ethereum alternative. In addition, Cardano supports non-fungible tokens (NFT)s. This makes the network a good Ethereum alternative as it is capable of supporting the growing community of NFT collectors.

Solana

Finally, there is one more project entitled by mass media as “Ethereum killer”. 

Indeed, the journalists had a good reason to do so. There were times when Solana approached Ethereum by market capitalization. Moreover, NFT support makes it another NFT Ethereum alternative to consider. Yet, some successful hacking attempts in 2022 have drained the enthusiasm of Solana’s followers. 

Nonetheless, the project is worth mentioning since it has some nice features it can boast of.

• Proof of History (PoH). Solana relies on a PoH consensus mechanism that uses historical records to prove the authenticity of transactions. It creates a verifiable, time-ordered sequence of events and secures them with the help of a cryptographic function.
• Fast transactions. Soana’s architecture doesn’t require nodes to communicate with each other in real-time to maintain the security of the network. Thus, the network can process up to 50,000 TPS at negligible fees. 
• Scalable. To attain scalability, Solana implements sharding technology. It divides the network into smaller groups of validators that process transactions independently from one another.
• Centralization concerns. On the web, there have been many talks about Solana’s high centralization. On one hand, such claims look strange as Solana features more than 1,500 validators. On the other hand, in 2022 alone, the network experienced 14 outages. Combined with the successful hacking attempts mentioned earlier, the question about its centralized nature is nothing but logical.

Bottom Line

As the blockchain market evolves, one can be sure to see more Ethereum competitors emerging.

Which of them is going to finally win the race and lead to the mass adoption of blockchain-based tools? Only the time will show.