Cardano Surpasses Solana in Weekly Fund Inflows: What Does This Mean?

During the past week, investment funds for Cardano saw higher inflows than those of Solana, indicating that investors may have a preference for the former.

According to data on digital asset fund flows shared by alternative asset manager CoinShares, Cardano saw inflows of $0.42 million last week, while Solana received $0.31 million. 

Cardano Sees More Inflows Than Solana

Higher inflows into Cardano reflect a heightened interest in the network compared to Solana. This could mean that investors are opting for stability over high speed and throughput.

Cardano is known for its security, decentralization, and sustainability, and it has stable development toward smart contract functionality. Recently, on-chain analysts identified a surge in activity for wallets holding large amounts of the network’s native asset, ADA. Also, the platform has witnessed strong GitHub activity, signaling strong developer commitment.

It is worth noting that Cardano has experienced only one brief outage in its seven years of existence. The incident happened on January 22, 2023, affecting 50% of Cardano’s nodes and causing them to drop off the network. However, the issue was fixed within minutes, and operations returned to normal.

Solana’s Network Challenges

On the other hand, Solana has experienced 11 downtimes since 2022, with some of the incidents lasting up to seven hours. The issues usually range from partial to total network outages, and their causes often include resource exhaustion attacks, denial-of-service attacks, and software vulnerabilities. The frequency of these outages has raised concerns about the sustainability of the Solana network.

Most recently, Solana faced a congestion issue due to increased user demand and bot transactions. The issue caused almost half of user transactions to fail. The rise in the network’s activity stemmed from the launch of several memecoins, which attracted new users to the blockchain. 

Although the Solana developer community has rolled out a fix for the congestion issue, the crypto community appears to be subconsciously expecting another network outage as such incidents have become tied to Solana’s image.

Despite Solana’s network challenges, the blockchain settled more transactions than other layer-1 chains, including Ethereum, Cardano, and Tron, in the first quarter of 2024. This shows that the shift in investor sentiment between Solana and Cardano, as seen in investment fund inflows last week, may be momentary, as the former still caters to the bulk of transactions for layer-1 chains.