In a September 25, 2024 report, investment firm VanEck highlighted Solana’s growing prominence in the blockchain space, predicting that the SOL token could reach $330. According to the report, Solana’s market capitalization has the potential to get 50% of Ethereum’s current value, as its network outpaces Ethereum in several key areas.
VanEck pointed out that Solana’s monolithic structure allows it to process thousands of transactions per second (TPS), making it 3000% faster than Ethereum. Furthermore, Solana boasts 1300% more daily active wallets than Ethereum, with significantly lower transaction fees. These advantages make Solana a more attractive option for payment and asset transfer activities, with stablecoins playing a major role in driving the network’s decentralized finance (DeFi) ecosystem.
While individual investors have started to recognize Solana’s potential, large institutional investors remain cautious about moving capital from Ethereum to Solana, given Ethereum’s established position in the market over the past decade.
VanEck also commented on Ethereum’s challenges, noting that the network has been impacted by the rise of Layer 2 (L2) solutions, particularly after the Dencun upgrade in March 2024, which dramatically reduced L2 transaction fees. This caused a migration of users away from Ethereum’s Layer 1 (L1) and contributed to a decline in the network’s revenue during the first quarter of 2024. However, by September, Ethereum’s fee revenue had begun to recover.
The report concluded by emphasizing that Layer 1 competitors such as Sui and Solana are rapidly closing the gap with Ethereum. Without significant progress, Ethereum could face stiff competition and a potential loss of market share in the future.
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