The Solana Network’s shooting in the spotlight may be far from over, especially now that Bank of America has expressed future optimism for the best smart contract platform, even comparing it to the ecosystem’s “Visa”. digital assets” after its management. to facilitate a large number of transactions over the past year.
In a note to investors on Tuesday shortly after welcoming Solana Foundation Fellow Lily Liu, the investment bank said Solana’s ease of use, scalability and low transaction fees prepared it to become a worthy competitor to Ethereum, and might even beat it one day soon.
Solana poised for extraordinary growth
Written by BOA analyst Alkesh Shah, the review also highlighted Solana’s impressive growth statistics since its launch in 2020. It has settled over 50 billion transactions, has a total locked value of over 11 billion dollars and was used to mint over 5.7 million. non-fungible tokens (NFTs), according to Shah. This has made it optimal for making micropayments and gaming transactions, Shah claimed, adding:
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has tradeoffs, exemplified by several network performance issues since its inception.”
Network outages and sustained attacks have actually become commonplace on the network, especially now that it has slipped into the mainstream. It faced multiple outages over the past 6 months that lasted for hours and prevented users from transacting. Often these outages are part of distributed denial of service (DDoS) attacks by hackers, but are also caused by network gaps.
Its main competitor and main DeFi network Ethereum, on the other hand, suffers from its own set of issues related to scalability, which has in fact been a key factor in the rise of alternative chains like Solana. Noting the same, Shah said,
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees sometimes exceeding the value of the transaction sent.”
In this sense, Ethereum could become the blockchain for “high-value transactions and identity, storage, and supply chain use cases,” while Solana grows as the settlement layer. Shah also felt that over time, however, rival blockchains will eventually eat away at Ethereum’s market share in the face of larger use cases and accelerated adoption.
BOA had recently announced a similar outlook for Avalanche, which is another smart contract platform that is rising through the ranks in popularity, adoption, and total value locked. Another note to investors last month argued that Avalanche’s ability to scale both securely and decentralized made it a viable alternative to Ethereum. This endorsement had also helped its native token AVAX to surge higher on the price charts.
However, not everyone may agree with the bank. Recently, Pantera Capital CIO Joey Krug had recently opined that while Ethereum could one day become big enough to become a very viable part of the global financial system, its competitors lack security and internal decentralization, which prevents them from becoming viable settlement layers.