Solana Challenges Ethereum's Lead In Blockchain Payments Race, Report Finds

A research report found that Solana SOL/USD has emerged as the new leader in the realm of blockchain payments.

What Happened: In its new report, Bernstein, a research and brokerage firm, attributes Solana’s success to its streamlined architecture, The Block reported.

Compared to Ethereum’s complex Layer-2 bridging system, Solana offers a single-layer design with direct on-ramps from crypto exchanges.

This, coupled with its high transaction throughput and low fees, has made Solana a more attractive platform for stablecoin settlements.

While Solana is gaining ground in transfers, Ethereum ETH/USD maintains a significant edge in overall stablecoin issuance.

USDC USDC/USD boasts a supply of $26.4 billion on Ethereum, dwarfing its $2.2 billion presence on Solana.

Also Read: Crypto Q1 Report Highlights 300% Meme Coin ‘Renaissance’ And ‘Major Step’ For Ethereum

Why It Matters: Despite its progress in stablecoin settlements, Solana still faces hurdles in becoming a mainstream payment platform.

The analysts at Bernstein point out that Solana needs a significant increase in transaction processing capacity to handle broader consumer and business-to-business payments.

Recent network congestion on Solana, caused by an influx of spam transactions, underscores the scalability challenge.

The development team is actively working on software updates, but a complete solution may take time.

The report also explores the broader stablecoin market, which has rebounded to $150 billion following the bear market.

Tether USDT/USD and USDC remain the dominant players, accounting for nearly 97% of the market share.

While the initial utility of stablecoins was primarily within the cryptocurrency ecosystem, the report identifies growing adoption by major payment processors like Visa and Paypal.

Additionally, consumer fintech platforms like Grab and Mercado Libre are exploring their use in cross-border payments.

The increasing value of stablecoin transfers in Q1 2024 suggests a potential for continued growth.

This trend highlights the growing adoption of “digital dollars” within the crypto ecosystem and beyond.

What’s Next: Benzinga’s upcoming Future of Digital Assets conference on Nov. 19 promises to be a valuable platform for investors and enthusiasts to gain insights into trends in the cryptocurrency markets.

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