In a January 11 research report, Bank of America digital asset strategist Alkesh Shah projected that Ethereum competitor Solana might become the “Visa of the digital asset ecosystem.”
Since its inception in 2020, the Solana network has evolved to become the sixth largest cryptocurrency, with a market valuation of $47 billion. It has been used to settle over 50 billion transactions and mint over 5.7 million non-fungible tokens, making it an order of magnitude faster than Ethereum (NFTs).
Critics say that its speed comes at the expense of decentralization and reliability, while Shah believes the advantages outweigh the drawbacks:
“Its ability to provide high throughput, low cost and ease of use creates a blockchain optimized for consumer use cases like micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming.”
He went on to say that Solana is stealing a piece of Ethereum’s market share because of its cheap costs, simplicity of usage, and scalability, while Ethereum may be confined to “high-value transaction and identity, storage, and supply chain use cases,” according to Shah, as reported by Business Insider.
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.”
Visa now handles 1,700 transactions per second (TPS), however the network can potentially accommodate as least 24,000 TPS. On the mainnet, Ethereum presently supports roughly 12 TPS (more on tier twos), while Solana has a theoretical maximum of 65,000 TPS.
“Solana emphasizes scalability,” Shah admits, “but a somewhat less decentralized and secure blockchain has drawbacks, as seen by multiple network performance concerns since creation.”
This assault happened less than a month after a previous one on December 10, when there were allegations of network congestion due by widespread botting related with an initial December offering (IDO) on Raydium, a Solana-based decentralized exchange platform.
Austin Federa, director of communications at Solana Labs, told Cointelegraph on December 22 that engineers are presently working to fix the network’s difficulties, notably enhancing transaction metering.
“Solana’s runtime is a new design. It doesn’t use EVM [Ethereum Virtual Machine] and a ton of innovation was done to ensure that users have the cheapest fees possible, but there’s still work to be done on the runtime.”