Originally published on: October 04, 2024
According to Sygnum, a Swiss crypto bank, the emergence of real-world asset tokenization platforms and stablecoins on Solana could potentially position the blockchain to challenge Ethereum in the long run. This trend has caught the attention of financial institutions, with even “conservative institutions” showing interest in Solana’s scalability over Ethereum’s stability and security advantages.
Sygnum highlighted that payment giant Visa recently integrated Solana for USD Coin settlement, praising its high throughput and low costs. Moreover, Franklin Templeton, a trillion-dollar asset manager, announced plans to launch a mutual fund on Solana, while Citi is exploring the blockchain for cross-border payments.
Despite these positive developments, there is still a significant market cap difference between Ether and Solana, currently standing at around $218 billion. Sygnum cautioned that some of Solana’s volume metrics may be overstated, with network revenue heavily influenced by memecoin issuance and trading.
Critics, including whistleblower Edward Snowden, have voiced concerns about Solana’s centralization, suggesting that the network could be easily disrupted. However, the Solana-to-Ether price ratio has seen significant growth, up 300% year-on-year and 600% since 2023.
While Ethereum continues to dominate the real-world asset tokenization and stablecoin markets, with 81% and 49% market share, respectively, Solana’s market share remains below 3%. Despite this, Sygnum believes that Ether may experience a “sharp reversal” following years of underperformance.
With Ethereum’s technical roadmap causing confusion among investors, many see it as a more attractive investment option than Bitcoin due to its perceived value. The risks of Ether being labeled a security by US regulators have decreased significantly, providing further support for its potential growth.
As the crypto landscape continues to evolve, the rivalry between Ethereum and Solana intensifies. While Ethereum maintains its stronghold in the market, Solana’s rapid growth and adoption by financial institutions suggest that it could pose a serious challenge to Ethereum’s dominance in the future. Only time will tell which blockchain will emerge victorious in the highly competitive crypto market.
