Solana to become like Visa, but for crypto: Bank of America

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Solana to become like Visa, but for crypto: Bank of America
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Solana will curve off Ethereum’s market share to see Visa-like transactions, says BofA strategist Alkesh Shah.

He cites advantages such as scalability, low fees and ease of use as what makes Solana a top blockchain for micropayments, DeFi, and NFTs.

Solana (SOL) price surged nearly 10% to $157 before paring gains on Thursday afternoon.

Solana could gradually nip at the market share of leading smart contracts platform Ethereum and become the “Visa of the Digital Asset ecosystem,” according to Bank of America.

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Alkesh Shah, a crypto strategist at the investment bank, says that Solana’s advantage over the Ethereum blockchain is down to three things: high scalability, very low transaction fees, and ease of use.

The Bank of America strategist said in a research note quoted by Business Insider that these factors could potentially push Solana to heights that make it ‘Visa of crypto.’

While several outages over the past few months have shown the blockchain is yet to surmount usage challenges, Shah says the current outlook makes for a greater future for the network.

He said in the research note that “[Solana’s] high throughput, low cost, and ease of use” have created a platform optimized for several use cases.

Other than micropayments, the blockchain is already commanding huge usage numbers in terms of consumers and developers for decentralized finance (DeFi), non-fungible tokens (NFTs), gaming and Web3.

In its predictions for 2022 last December, Arcane Research said Solana and other layer-1 blockchain platforms could outperform Ethereum.

Solana’s “Visa of crypto” comparison

The Solana blockchain is a proof-of-stake network that officially launched in 2020, with SOL as the native token. Since then, the SOL token has seen massive growth to see the blockchain rank among the top 10 by market cap.

Visa is a leading payments firm with a global presence, settling billions of transactions annually. Last year, the payments giant announced it had processed over 164 billion transactions.

In comparison, Solana’s blockchain saw over 50 billion transactions, with growth also seen across the spike in NFTs and Total Value Locked at 5.7 million and $11 billion respectively.

While Visa can handle up to 24,000 transactions per second (TPS), Solana’s can go up to 65,000 TPS. Ethereum, on the other hand, processes 12 TPS on-chain and can scale more with layer 2 options.

Such numbers give Solana the weapons to eat into Ethereum’s market. However, Shah noted that while the platform holds the upper hand in speed and low costs, there are “trade-offs” when it comes to decentralization and security.

Solana’s price surged after the BofA news, with SOL briefly the top gainer among the 10 largest coins by market cap. The SOL/USD pair rallied more than 9% in early deals on Thursday before paring some of the gains made to intraday highs of $157.

As of writing, the cryptocurrency was trading around $151.



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