[After the launch of PayPal USD, Solana becomes the favorite of institutions]
Solana, the fourth-ranked blockchain in total value locked (TVL), is becoming the industry’s leading network for institutional adoption.
More and more financial institutions will integrate with the Solana blockchain to "future-proof" their products, according to Robinson Burkey, co-founder and chief commercial officer of the Wormhole Foundation.
“Solana is a good fit for institutions,” Burkey wrote in research notes shared with Cointelegraph. “Industry leaders like PayPal, Stripe, and Visa must future-proof their products. The best way to do this is to meet with their most advanced users. , these users are adopting their platform and you will likely see more Solana institutional moments in the coming years.”
On May 28, PayPal expanded its PayPal USD (PYUSD) stablecoin to the Solana network, moving it to a blockchain beyond the Ethereum ecosystem for the first time.
The integration will enable Solana users to conduct low-cost transactions on the Internet using PYUSD, aiming to expand the applicability of the stablecoin to meet the needs of daily purchases.
In September 2023, global payments giant Visa launched USD Coin (USDC) on the Solana blockchain, the second supported network for the stablecoin after Ethereum.
Solana is one of the most scalable blockchain networks and can handle large volumes of transactions.
Solana can theoretically achieve 65,000 transactions per second (TPS), with an average transaction cost of $0.0025, far exceeding Ethereum’s 15 TPS and expensive gas fees, which start as high as $1 but can reach $50 when the network is congested.
Solana’s infrastructure can easily integrate with traditional payments institutions’ existing processes, which will lead to greater institutional adoption, according to Ran Goldi, Vice President of Payments at Fireblocks. He wrote: “With confidential transfers becoming a basic payment requirement for a large number of processors, we will see more names adopt blockchain as part of their processes. In my opinion, the key is to ensure that your block The chain can support the "underlying" payment requirements of compliance, supervision and privacy. "
Adding confidential transfer capabilities could unlock more institutional partnerships for Solana, Goldi added: “Doing this, coupled with speed and broad liquidity, [Solana] can become a weapon for payment institutions."
According to DefiLlama data, Solana is currently the fourth largest blockchain network, with over $4.7 billion in TVL, accounting for 4.49% of the total TVL of all blockchains.
In addition to increasing institutional adoption, Solana could be the next cryptocurrency to gain spot exchange-traded funds (ETFs), according to Zeta Markets founder Tristan Frizza.
Frizza wrote in notes shared with Cointelegraph: “Solana is considered one of the ‘big three’ cryptocurrencies outside of BTC and ETH, and many analysts expect a Solana ETF to be imminent. With PayPal, Stripe, Shopify Pay and PayPal Adoption of Solana by major partners, merchants and institutions is likely to grow.”
Hopes for a Solana-based spot ETF first surfaced in January, when asset management giant Franklin Templeton praised Solana’s integrated approach to blockchain scaling, calling it a “powerful application of decentralized blockchain,” according to a Jan. 17 X post.
Crypto investor and CNBC Fast Currency trader Brian Kelly also speculated that Solana could be the next U.S. cryptocurrency to receive a spot ETF.
