Ethereum used to dominate almost all non-Bitcoin blockchain sectors in the industry but has gradually lost some of its grip over certain markets to competitors like Solana.
VanEck’s research department, MarketVector, decided to delve deep into the battle between the two layer-1 behemoths to see what’s what.
Solana Vs. Ethereum
The report, authored by Martin Leinweber, highlights some major differences between the two. In some cases, such as the number of transactions, daily active users, and transaction fees, Solana takes the lead with a massive margin and predicts a bright future for the blockchain.
“When comparing Ethereum and Solana, the data is striking. Solana processes 3,000% more transactions than Ethereum, has 1,300% more daily active users, and its transaction fees are nearly 5 million percent cheaper. These are monumental differences that showcase Solana’s potential efficiency and scalability advantages.
Given these statistics, it’s hard not to wonder why we haven’t seen a larger migration toward Solana from Ethereum, particularly from institutions.”
Still, Ethereum has the edge in other metrics, such as the total value locked. In fact, the TVL on the world’s second-biggest blockchain is over 56%, according to data from DefiLlama, while Solana’s share is just 6%.
In terms of institutional adoption, Solana trails behind its older competitor, which received further validation in July this year when the US SEC greenlighted nine spot Ethereum ETFs. Although their adoption rate has struggled, the approvals still show that institutional investors have more appetite for ETH for now.
The landscape around a Solana ETF is quite controversial in the States. While other countries, like Brazil, have already greenlighted such products, BlackRock execs recently said, “It will be a while before we see” a Solana ETF in the US.
Is SOL Undervalued?
Based on some of the metrics and developments listed above, MarketVector’s analysis suggested that SOL’s price could be undervalued compared to that of ETH. Leinweber asserted that if Solana “continues to outperform in transaction volume and user engagement,” its market capitalization could reach 50% of Ethereum’s.
Should that is to transpire, SOL could surge to $330 given ETH’s current price and market cap of $2,620 and $315 billion, respectively.