Solana still has to point out convincing signs that it could exceed Ethereum as a preferred blockchain for institutions, for the reason that income that depends heavily on Memecoins is taken into account unstable, based on the Crypto Bank Group Sygnum.
In a blog post dated May 8, Sygnum said that the present feeling in Ethereum stays “poor”, whereby the market focuses on Solana's “transaction volume and its latest dominance within the generation of fees”.
However, Sygnum said that “the medium -term prospects will primarily be shaped by the platform number of the standard financial institutions with the intention to bring their product offers” not by mood.
“We don’t see any convincing signs that Solana is the popular selection, for the reason that security, stability and sturdiness of Ethereum are highly valued,” added.
Sygnum argued that institutions could select Ethereum about Solana since the market considered the latter to provide sales as “less stable” since the Memecoin sector is “highly concentrated”.
“This will restrict the outperformance, because it may very well be argued that the differences within the evaluation are taken into consideration by this difference within the sources of income,” said the corporate.
Transactions on Solana (purple) exceed those on Ethereum and his layer 2, however the latter has more emphasis on the deportation. Source: Dune Analytics
Another factor is Solana's TOKENOMICS, which, based on Sygnum, was “a comparable problem” for the criticism that was equipped with Ethereum in regards to the stagnating transaction volumes of its essential network since it lowers the prices for its layer -2 networks.
The company said Solana headed Ethereum available in the market share for shift 1 fees, “most fees are paid to validators and don’t increase the worth of the Solana token.”
“When it involves revenue, Ethereum Solana still exceeds 2- 2.5x,” said Sygnum.
It was argued that Solana's tokenomic is “easier to vary” than Ethereum's scaling strategy. Nevertheless, it was said that Solana is “not inclined to realize more to the token” when his community put down a proposal to chop the inflation rate of the SO in March.
Solana could win with stable sales focus
Sygnum noted that Solana, who celebrated some as a “Ethereum killer”, which could query the market share of the network, could make some profits in No. 2 blockchain.
The company said Ethereum had the dominant market share in “Application cases which have traction” with the support of governments, supervisory authorities and traditional funds – akin to tokenization, stable coins and decentralized funds.
However, it added that Solana had made progress in the quantity of value that were locked up on its decentralized financial protocols, and if it gains in “more stable sources of income” akin to tokenization and stablecoins, it could win to Ethereum.
Sygnum added that Solana still has a robust support, even when the Ethereum Foundation redesigned its priorities to layer 1 and “recognize the necessity to adapt its strategy of the market”.
However, this might give an mood wind for Ethereum, for the reason that “2-year under-performance VS Solana” of the blockchain has been temporarily arrested for the reason that peaking point of the inspiration.
