Solana, the fifth-largest cryptocurrency in terms of its market capitalization of $47.15 billion is witnessing a growing fondness among esteemed institutions. This was brought to light when Bank of America hosted Solana Foundation member Lily Liu. BoA believed that Solana blockchain could become the “Visa of the digital asset ecosystem” as it focused on scalability, low transaction fees, and ease of use.
The adoption and growth have witnessed a strong uptick over the past year. This statement stood true for most projects in the crypto ecosystem but not all have a sustainable growth structure. Solana settled over 50 billion transactions and has over $11 billion in total value locked. These numbers were huge for a fairly new crypto project as the established global payments giant, Visa processed 164.7 billion transactions in the year ended 30th September.
Although the gap was large, it looks achievable as the project looks to scale. Solana is optimized for consumer use cases as it allows micropayments and is also utilized in gaming.
Alkesh Shah wrote in the research note,
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by several network performance issues since inception. Ethereum prioritizes decentralization and security but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.”
Could Solana replace Ethereum?
Deemed as the ‘Ethereum killer’ Solana’s ecosystem also has many hurdles to surpass before it could challenge Ethereum’s supremacy as the leader of the altcoins. One of these hurdles will be to up its security as the blockchain suffered an outage for the third time in a matter of months earlier in January 2022.
While some speculated a distributed denial-of-service [DDoS] attack by hackers, the Solana founder, and CEO, Anatoly Yakovenko denied this speculation. He noted,
“That’s not at all what happened. There was some congestion due to mis-metered transitions, and some users experienced their Txs timing out and had to retry.”
Although the low fees were beneficial for users and provided an alternative to Ethereum, it was proving to attract bad actors to overwhelm the network with a bunch of transactions.
If Solana wanted to lead the alts, it will have to work on better securing its platform as consecutive attacks will discourage many serious traders. As the ecosystem expands with adoption increasing manifolds, Solana could not yet be counted out as a competition for the second-largest cryptocurrency, Ethereum.
The BoA also believed that Solana with other alts could grab market share from Ethereum over time to distinguish themselves through user adoption and developer interest.