PayPal Turns to Solana for Expanding PYUSD, Venturing Beyond Ethereum Ecosystem
Summary:
PayPal chooses the Solana blockchain for its first venture beyond the Ethereum ecosystem to expand its stablecoin, PayPal USD (PYUSD). This integration seeks to provide users with more affordable transactions and broaden PYUSD's use as a payment method. Solana surpasses Ethereum's operational capacity and processing speed, promoting faster and more cost-effective transactions. Despite recent network disruption challenges, Solana continues to outperform in stablecoin transfer volume. PayPal launched its stablecoin, PYUSD, in collaboration with Paxos Trust Company in 2023.
PayPal has ventured beyond the Ethereum ecosystem for the first time, opting for the Solana blockchain as a platform to extend its stablecoin, PayPal USD (PYUSD). As indicated in a declaration on May 28, PYUSD has been integrated into the Solana network, paving the way for users to complete transactions at decreased costs. The initiative aims to broaden the application of PYUSD as a payment option suitable for everyday, minor scale purchases.
Processing up to 65,000 transactions per second at mere rates as low as $0.0025, Solana vastly outstrips Ethereum, who currently manages about 15 transactions per second and charges varying fees ranging between $1 and $50 amidst traffic jams. This means a transaction that would take several minutes on Ethereum could be wrapped up in less than sixty seconds when conducted on Solana.
“Integrating PYUSD into the Solana blockchain aligns seamlessly with our objective of facilitating a digital currency that holds a steady value and is ideal for trade and payments,” commented PayPal’s SVP of blockchain, Jose Fernandez da Ponte.
Through this integration, users of both PayPal and Venmo wallets will experience no differentiation between chains, ensuring unified PYUSD totals no matter the hosting network. Last year alone Solana has emerged as the top preferred blockchain for stablecoin transfers. In comparison, analytics from Artemis indicate that Solana handled stablecoin transfers amounting to $1.5 trillion - a significant advance over Ethereum's $885 billion - over the past year.
However, Solana faces its own share of hurdles, primarily in the form of repeated network disruptions. The most recent occurred on February 9, with transactions at a standstill for almost five hours. A forthcoming update called Firedancer, expected to roll out in the next few months, aims to boost Solana's overall dependability and capacity.
Stablecoins are cryptocurrencies specifically designed to retain a uniform value, typically by being tied to a more stable reserve asset like the American dollar. PayPal debuted its own stablecoin in August 2023, joining hands with Paxos Trust Company. Initially, the stablecoin was only issued on Ethereum as an ERC-20 token and is supported by deposits of US dollars, short-term treasuries, and melting equivalents.
According to data from DefiLlama, Tether (USDT) currently dominates nearly 70% of the stablecoin market, boasting a market capitalization of about $111 billion, with PYUSD presently valued just shy of $273 million.
Published At
5/29/2024 4:00:00 PM
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