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Although investors “have been allocating a lot” to Solana throughout 2023, ethereum will still be the leading smart contract platform in 2024, Coinbase says.
in a new crypto-market-outlook” target=”_blank” rel=”noreferrer noopener”>report Titled “crypto Market Outlook to 2024,” Coinbase noted that throughout 2023 net inflows into investment funds related to Solana (SOL) ranked second only to bitcoin (btc), surpassing ethereum (eth). and other multi-asset fund flows.
Analysts at the US-based crypto exchange attributed the surge in investment in Solana to the network's ability to handle high transaction volumes and low fees, which they say are necessary to support a new wave of high performance applications.
“In fact, we believe that improving transaction performance and reducing fees is necessary to improve UX and incorporate a number of new use cases, and Solana has an early advantage in that regard.”
Coinbase
Despite Solana's growing popularity, ethereum remains the largest smart contract platform in the cryptocurrency space, Coinbase noted. Processing an average of around 1 million transactions per day and maintaining a constant daily transfer volume between $1 billion and $3 billion, ethereum's status as the leading platform for decentralized applications “may not be displaced anytime soon.” “says Coinbase.
At press time, eth is trading at $2,280, demonstrating a 91% increase year-to-date, according to data from CoinGecko. Solana SOL is trading at $78.3 with a staggering 697% increase in 2023.
However, Coinbase noted that while ethereum's dominance in the smart contract space is likely to persist for the foreseeable future, Solana's scalability and performance could make it a viable alternative for some use cases in 2024.
The exchange's experts added that in addition to Solana, a group of other layer 1 networks, such as Aptos, Sui, Sei and others, are likely to increase competition in the space as they “handle scalability demands at the layer base”.
