Solana's monolithic architecture enables the network to take advantage of speeds and efficiencies not possible with modular blockchains.
A report published by VanEck on September 25 predicted that Solana ($SOL down $150) could reach $330 and swell to 50% of Ethereum (Ethereum down $2,612)'s current market cap, mainly due to Solana Excellent speed and transaction processing metrics.
The report cites Solana’s throughput, which can handle thousands of transactions per second (TPS), which is 3,000% higher than Ethereum’s TPS. Solana has 1,300% more daily active users than Ethereum, and transaction fees are nearly 5 million% cheaper on the Solana network.
The report’s authors believe Solana’s clear advantages in speed and cost efficiency give it an edge over Ethereum for payments and remittances. Stablecoins in particular are considered a major driver of decentralized finance activity and can leverage Solana’s superior processing metrics to pass cost savings on to users.
Source: Solana CompassSolana’s Transactions Per Second Index
The author said that retail investors are "slowly realizing" Solana's potential to challenge Ethereum as a smart contract platform, and are confused that institutional investors have not yet realized Solana's advantages. The report speculates that one possible reason for the lag in institutional investor adoption could be a reluctance to switch from blue-chip assets like Ethereum to the younger Solana.
VanEck analyzes Ethereum’s dismal price action
Back in September 2024, VanEck published a report outlining the factors suppressing the price of Ethereum. According to VanEck’s analysis, Ethereum’s poor price performance is primarily driven by the extraction of value from the Ethereum Layer 2 network.
The explosion of Ethereum Layer 2 scaling solutions follows changes made with Ethereum’s Dencun upgrade in March 2024, which significantly reduced transaction fees on the Ethereum Layer 2 network.
Source: Token Terminal Ethereum network fees from April 2024 to September 2024
The dramatic growth of these second-tier projects and the dramatic reduction in transaction fees have caused Ethereum’s first-tier revenue to plummet 99% since March 2024. However, Ethereum network fees successfully recovered in late September 2024.
VanEck also singled out the migration of users to faster layer-1 networks like Solana and Sui ($SUI) as another major factor suppressing Ethereum prices and trading revenue. According to VanEck’s report, Ethereum still enjoys a first-mover advantage, but that advantage is quickly disappearing.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "MarsBit"
Original article by Vince Quill, Cointelegraph
