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Analysts at Bank of America said Solana could steal market share from Ethereum. Noting that Solana is optimized for micropayments, games, and non-fungible tokens (NFTs), the analyst predicts that “Solana could become the Visa of the digital asset ecosystem.”
Bank of America on Crypto, Ethereum and Solana
Bank of America (BOFA) analyst Alkesh Shah released a research note on cryptocurrencies this week, arguing that Solana could take market share away from Ethereum.
Solana Foundation member Lily Liu is quoted by Bank of America analysts as saying Solana “produces a blockchain optimized for consumer use cases by prioritizing scalability, low transaction fees, and ease of use.”
Its ease of use and low cost make the cryptocurrency optimized for micropayments, gaming, and non-fungible tokens (NFTs). Since its launch in March 2020, more than 50 billion transactions have been completed, with a total locked value of $10 billion, Shah said:
Solana could become the Visa of the digital asset ecosystem.
Solana is the fifth largest cryptocurrency with a market cap of around $46 billion. Ethereum is the second-largest cryptocurrency with a market cap of nearly $400 billion at the time of writing, according to Bitcoin.com Markets.
Shah noted that Solana’s differentiation from Ethereum “proved to be successful” and that the valuation gap presents an opportunity for Solana. Bank of America analysts believe that its Proof of History blockchain helps improve the performance of its proof-of-stake consensus mechanism, stating:
These innovations allow an industry-leading ~65,000 transactions per second to be processed with an average transaction fee of $0.00025, while remaining relatively decentralized and secure.
Meanwhile, Shah described that the Ethereum blockchain prioritizes decentralization and security at the expense of scalability, adding that Ethereum’s scalability issues have led to network congestion and high transaction fees. period.
Emphasizing that other scalable blockchains could dent Ethereum’s market share, Shah explained:
Ethereum priorities can be optimized for high-value transactions and identity, storage, and supply chain use cases.
Cryptocurrency exchange Coinbase recently expected That”Ethereum Scalability will be improved. “However, “Scalability Challenges As We Welcome Next User With Encryption and Web3 Ethereum may grow. “
Last week, a JPMorgan analyst explained that the introduction of Ethereum’s Merge and Layer 2.0 will Speed up transactions And can significantly reduce energy consumption.However, another JPMorgan analyst famous Ethereum may lose its decentralized finance (defi) dominance due to scaling issues.
Solana, meanwhile, is not without problems.Bitcoin.com News Last Week report The Solana network experienced “degraded performance due to an increase in high-compute transactions… which resulted in increased load and transaction times, as well as some failed transactions.”
Do you agree that Bank of America’s Solano will take market share from Ethereum and become the Visa of cryptocurrencies? Let us know in the comments section below.
Image Source: Shutterstock, Pixabay, Wiki Commons
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