ethereum used to dominate almost every non-bitcoin blockchain sector in the industry, but it has gradually lost some of its grip on certain markets to competitors like Solana.
VanEck’s research arm, MarketVector, decided to delve deeper into the battle between the two layer-1 giants to see what’s what.
Solana vs ethereum
He eth-vs-sol?utm_source=marketvector&utm_medium=social&utm_campaign=MVIS100″ data-wpel-link=”external” target=”_blank”>reportThe article, written by Martin Leinweber, highlights some important differences between the two. In some cases, such as the number of transactions, daily active users, and transaction fees, Solana is ahead by a huge margin and predicts a bright future for the blockchain.
“When comparing ethereum and Solana, the data is astonishing. Solana processes 3,000% more transactions than ethereum, has 1,300% more daily active users, and its transaction fees are almost 5 million percent cheaper. These are monumental differences that show Solana’s potential efficiency and scalability advantages.
“Given these statistics, it’s hard not to wonder why we haven’t seen a larger migration to Solana from ethereum, particularly from institutions.”
Still, ethereum has the edge in other metrics, such as total value locked. In fact, the TVL on the world’s second-largest blockchain is over 56%. according according to data from DefiLlama, while Solana's share is only 6%.
In terms of institutional adoption, Solana lags behind its older competitor, which received further validation in July this year when the US SEC green-lighted nine spot ethereum ETFs. Although its adoption rate has been rocky, the approvals still show that institutional investors have more appetite for eth for now.
The outlook for a Solana ETF is quite controversial in the United States. While other countries, such as Brazil, have already given the green light to such products, BlackRock executives recently said that “it will be a while before we see” a Solana ETF in the United States.
Is SOL undervalued?
Based on some of the metrics and developments listed above, MarketVector’s analysis suggested that SOL’s price could be undervalued compared to that of eth. Leinweber claimed that if Solana “continues to outperform in transaction volume and user engagement,” its market cap could reach 50% of ethereum’s.
If that happens, SOL could rise to $330 given eth’s current price and market cap of $2.62 billion and $315 billion, respectively.
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(tags to translate)ethereum