Solana Attracts Increased Institutional Adoption; possiblity of ETF Spot Advances
Summary:
Solana, the fourth-largest blockchain by total value locked, is garnering increased interest from financial institutes seeking to future-proof their services according to Wormhole Foundation's co-founder, Robinson Burkey. Recent examples include PayPal extending its PYUSD stablecoin onto the Solana network - its first move beyond Ethereum - and Visa launching its USDC on Solana. Other attributes, like its capacity to facilitate a large number of transactions and the likelihood of its token getting an ETF spot, are factors accentuating Solana's appeal.
Solana, presently the blockchain with the fourth highest total value locked (TVL), is on the path to becoming a major player in institutional adoption. A large number of financial institutions are likely to integrate the Solana blockchain in order to ensure the relevance of their services in the future, says Robinson Burkey, Wormhole Foundation's Chief Compliance Officer and co-founder. In a research note, he shared with Cointelegraph, Burkey suggested that companies at the forefront of their industry, such as PayPal, Visa, and Stripe, need to remain relevant by connecting with their most forward-minded users on the platforms they are shifting towards, implying Solana could see many more institutions using its platform in the near future.
PayPal recently extended its PayPal USD (PYUSD) stablecoin onto the Solana network, marking its first instance of branching beyond Ethereum. This will now allow Solana users to engage in low-cost PYUSD transactions on the network, thus increasing the utility of the stablecoin for everyday purchases.
In 2023, global payment behemoth Visa launched its USD Coin (USDC) on Solana, the second blockchain to support the stablecoin following Ethereum.
Out of several blockchain networks, Solana has proved to be one of the most scalable, capable of handling a large number of transactions. Its potential 65,000 transactions per second (TPS) with an average transaction cost of $0.0025, is superior compared to Ethereum’s 15 TPS and high gas fees.
According to Ran Goldi, vice president of payments at Fireblocks, Solana's scalable infrastructure can easily facilitate the existing operations of traditional payment institutions leading to increased institutional adoption. He further stated that implementing a confidential transfers feature could potentially attract even more institutions to partner with Solana. Solana, according to DeFiLlama data, is currently the fourth-largest blockchain network with over $4.7 billion in TVL.
Looking beyond the rise in institutional adoption, Tristan Frizza, founder of Zeta Markets stated that Solana's (SOL) cryptocurrency could potentially be the next one to secure a spot as an exchange-traded fund (ETF). Earlier this year, hopes for a Solana-based ETF were raised when asset management company Franklin Templton lauded Solana’s massive blockchain scaling capability, referring to it as a “powerful use case of decentralized blockchains”.
Brian Kelly, a crypto investor and trader for CNBC Fast Money, also believes that Solana could be the next crypto to get listed in a US-based ETF.
Published At
6/4/2024 3:21:53 PM
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