The prominence of the Solana network may not be over yet, especially now that the US Central Bank has expressed future optimism for the leading smart contract platform, even likening it to it. as the “Visa of the Digital Asset Ecosystem” after it managed to facilitate a large number of transactions over the past year.
In a note to investors on Tuesday shortly after Solana Foundation member Lily Liu, the investment bank said Solana’s ease of use, scalability and low transaction fees have made it become a worthy competitor to Ethereum and maybe even beat it one day soon.
Solana is ready for extraordinary growth
Written by BOA analyst Alkesh Shah, the advice also highlights Solana’s impressive growth stats since its initial launch in 2020. It has settled more than 50 billion transactions, totaling a price. worth more than $11 billion and was used to mint more than 5.7 million according to the Shah. This has made it optimal for making micropayments and games transactions, Shah further asserts,
“Solana prioritizes scalability, but a relatively less decentralized and more secure blockchain has trade-offs, exemplified by a number of network performance issues since its inception.”
Loss of life and protracted attacks have in fact become common online, especially now that it has become a common trend. It has faced multiple six-month, hour-long outages and banned users from making transactions. Usually, these outages are part of distributed denial of service (DDoS) attacks by hackers but can also be caused by network flaws.
Solana’s trump card
On the other hand, its main competitor and leading DeFi network, Ethereum, faces a series of problems related to scalability, which is in fact the main factor behind the rise of blockchains. alt like Solana. Also of note, Shah said,
“Ethereum prioritizes decentralization and security, but at the cost of scalability, this has led to periods of network congestion and transaction fees that are sometimes greater than the value of the transaction being sent.”
In this sense, Ethereum could become the blockchain for “high-value transactions and identity, storage, and supply chain use cases,” while Solana develops itself as a mediation layer. However, Shah also confirmed that over time, rival blockchains will eventually eat away at Ethereum’s market share in the face of larger use cases and accelerated adoption.
The BOA recently offered a similar outlook to Avalanche, another smart contract platform that is climbing in popularity, adoption, and total locked-in value. Another note for investors last month argued that Avalanche’s ability to scale both securely and decentralized made it a viable alternative to Ethereum. This endorsement helped its native token AVAX also jump on the price charts.
However, not everyone can agree with the bank. Pantera Capital CIO Joey Krug recently revealed that while Ethereum could one day grow large enough to become a very viable part of the global financial system, its competitors lack internal security and decentralization, prohibiting them from being possible classes of mediation.