Both Solana and Ethereum have achieved significant milestones while fostering a competitive rivalry, but recent events could further exacerbate tensions between the two.
Swiss crypto bank Sygnum, in its monthly report, calls Solana (SOL) the most important challenger to Ethereum (ETH) in the financial sector and a viable alternative for numerous deployments and development breakthroughs. He emphasized that there is.
Solana, often referred to as the “Ethereum killer,” has steadily gained momentum by exploiting Ethereum’s weaknesses to establish a competitive advantage.
However, as Ether continues to outperform Solana, there is a large gap in market cap of approximately $218 billion. Despite this, Solana’s price ratio to Ether has increased by 300% year over year. What caused the surge?
Solana’s strong foothold in the financial sector
A similar conflict between SOL and ETH occurred two years ago when Solana partnered with Visa. At the time, SOL was integrated with USD Coin payments and touted its high throughput and low costs.
The rally was further strengthened recently by asset manager Franklin Templeton’s announcement that it would launch a mutual fund in Solana.
Solana’s growing resourcefulness in the financial sector has led the Swiss bank to recognize blockchain as a “serious challenger” to Ethereum in the long term.
Although there is no clear timeline for when this change will occur, there is no doubt that Solana is closing the gap with Ethereum on a variety of metrics.
First, Ethereum DEX trading volume had declined from $2 billion in August to $1.7 billion at the time of writing. On the contrary, Solana’s DEX volume has remained stable and even improved over the same period.
Source: Artemis Terminal
In other words, a partnership with a major financial institution like Visa could increase Solana’s visibility, attract new investors, and challenge Ethereum’s dominance.
Beyond these collaborations, the continued comparison between Solana and Ethereum is supported by a well-thought-out strategy. It aims to overtake the Ethereum blockchain of five years ago.
Solana takes advantage of Ethereum’s shortcomings
Solana’s architecture supports high throughput and low transaction fees, making it attractive to both users and developers.
In contrast, Ethereum faces the challenge of high gas costs that can prevent users from joining its network.
Source: Dune
The impact of this difference is evident in the graph above. Solana has more than 1 billion transactions per month, while Ethereum has slow network activity with just 200 million transactions.
Obviously, Ethereum’s high gas fees drove users to Solana for low-cost, fast transactions.
Read Solana (SOL) price prediction for 2024-2025
Essentially, Solana has garnered a lot of attention in just four years since its launch. However, while SOL is better in some areas, Ethereum still dominates in others.
Overall, for Solana to truly compete with Ethereum, it will need to develop innovative decentralized applications that drive widespread adoption. This space is currently dominated by Ethereum.
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