How Solana Could Achieve 50% of Ethereum’s Market Cap: VanEck

Ethereum historically held a dominant position in nearly all non-Bitcoin blockchain sectors. However, it has gradually started to cede ground to competitors like Solana in certain markets.

MarketVector, the research division of VanEck, undertook a comprehensive study to compare the two layer-1 giants and analyze their respective strengths and weaknesses.

Solana Vs. Ethereum

The report by Martin Leinweber outlines several significant differences between the two platforms. In several areas, such as transaction volume, daily active users, and transaction fees, Solana outperforms Ethereum by a considerable margin, suggesting a promising future for the blockchain.

“When comparing Ethereum and Solana, the data reveal stark contrasts. Solana handles 3,000% more transactions than Ethereum, boasts 1,300% more daily active users, and its transaction fees are nearly 5 million percent cheaper. These substantial discrepancies highlight Solana’s potential advantages in efficiency and scalability.

Considering these figures, it prompts the question of why a larger exodus from Ethereum to Solana hasn’t been more pronounced, especially among institutional players.”

Nonetheless, Ethereum maintains an advantage in other areas, such as total value locked (TVL). Notably, the TVL on the second-largest blockchain exceeds 56%, as per data from DefiLlama, while Solana accounts for only 6%.

In terms of institutional adoption, Solana lags behind its older counterpart, which received further endorsement in July when the US SEC approved nine spot Ethereum ETFs. Even though the uptake is slow, these approvals indicate that institutional investors currently show a stronger preference for ETH.

The discourse surrounding a potential Solana ETF remains contentious in the United States. Despite other nations, such as Brazil, having already approved such products, BlackRock executives recently commented, “It will be a while before we see” a Solana ETF in the US.

Is SOL Undervalued?

According to various metrics and developments highlighted earlier, MarketVector’s analysis indicates that SOL’s price might be undervalued relative to ETH. Leinweber noted that if Solana “continues to excel in transaction volume and user engagement,” its market capitalization could reach as much as 50% of Ethereum’s.

If this comes to pass, SOL could potentially rise to $330, given ETH’s current price and market cap of $2,620 and $315 billion, respectively.