A recent report from VanEck indicates that Solana is currently undervalued considering its technical achievements and might be able to capture 50% of Ethereum’s market cap.
For Solana to achieve these projected gains, it needs to leverage its strengths such as rapid transaction speeds and minimal fees, while also countering Ethereum’s established “first-mover advantage.”
Solana Challenges Ethereum’s Dominance
A new report from MarketVector, a research division of VanEck, provides an optimistic outlook for Solana. The report compares Solana to Ethereum across various dimensions, showcasing several notable advantages that position Solana for significant growth.
It posits that Solana could potentially reach 50% of Ethereum’s market cap. However, this dramatic transformation requires Solana to strategically navigate its path.
Recently, Solana’s ascent has been remarkable, fueled by major technological developments. These advancements, along with a growing institutional interest, have elevated Solana’s visibility. VanEck supported this trend with solid user data reflecting the asset’s increasing significance.
“When evaluating Ethereum and Solana, the data is remarkable. Solana handles 3,000% more transactions than Ethereum, boasts 1,300% more daily active users, and its transaction fees are nearly 5 million percent lower. These are substantial differences illustrating Solana’s potential efficiency and scalability advantages,” the report asserted.
Read more: Solana vs. Ethereum: The Ultimate Comparison
Despite these technological advantages, SOL’s market cap is currently only 22% of ETH’s. VanEck attributes much of this disparity to Ethereum’s established “first-mover advantage” and the institutional adoption it has experienced, particularly evident in the Ethereum ETF.
Nevertheless, the report suggests that these advantages may not guarantee Ethereum’s dominance indefinitely. To bridge the gap, Solana should concentrate on its competitive strengths.
The report emphasizes DeFi, stablecoins, and payment solutions as critical areas where Solana can compete with Ethereum. Solana’s ability to surpass Ethereum in speed and efficiency will be key to gaining a competitive edge in these rapidly growing markets.
“Another significant use case is lending and borrowing in the DeFi space, which is projected to grow rapidly. Payments and remittances also present vast opportunities, particularly given Solana’s lower fees and faster transaction speeds. If both institutions and everyday users can save money through quicker, cheaper transactions, Solana’s user base could expand at an even faster rate,” stated VanEck.
At the very least, Solana is excelling in several domains. For instance, data from CoinGecko reveals that a variety of Solana-based meme coins are outpacing their Ethereum counterparts. While pet-themed cryptocurrencies have surged across the board in 2024, those on Solana are experiencing notably higher growth.
Read more: How to Acquire Solana Meme Coins: A Step-By-Step Guide
However, Ethereum will not relinquish its market share without resistance. As BeInCrypto reported, it outperformed Bitcoin in a late September rally, indicating potential for future growth. While Bitcoin’s ETFs might be performing better than Ethereum’s, ETH is still gaining ground. Solana has a challenging road ahead to capture 50% of Ethereum’s market cap, but it remains a feasible goal.
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