04 Jun

Solana, ranked as the fourth-largest blockchain by total value locked (TVL), is witnessing a surge in institutional adoption.

Robinson Burkey, co-founder and chief commercial officer of Wormhole Foundation, highlighted the growing trend of financial institutions embracing the Solana blockchain to future-proof their services. He emphasized that industry leaders like PayPal, Stripe, and Visa are recognizing the importance of meeting the demands of their forward-thinking users on emerging platforms like Solana.

Recent developments reflect this trend, with PayPal expanding its PayPal USD stablecoin to the Solana network on May 28, marking its first venture outside the Ethereum ecosystem. This move aims to facilitate cost-effective transactions for Solana users, enhancing the utility of the stablecoin for everyday purchases.

Additionally, in September 2023, Visa launched USD Coin (USDC) on the Solana blockchain, making it the second network, after Ethereum, to support the stablecoin.

Increased institutional deployment of Solana — Fireblocks

One of the most scalable blockchain networks that can manage a lot of transactions is called Solana.

Compared to Ethereum, which can only process 15 transactions per second (TPS) and has far higher gas fees (which start at $1 and can go as high as $50 during network congestion), Solana can theoretically process up to 65,000 TPS at an average transaction cost of $0.0025.

According to Ran Goldi, vice president of payments at Fireblocks, Solana's architecture can effortlessly integrate the current flows of traditional payment institutions, which will lead to greater institutional adoption:

"We anticipate more brands integrating the blockchain into their processes as private transfers become a fundamental payment need for high-volume processors. From my perspective, the crucial aspect is ensuring that your blockchain is capable of meeting the "behind the scenes" payment needs related to regulation, privacy, and compliance."

More institutional collaborations for Solana might be unlocked by implementing a confidential transfers option, according to Goldi.

When payment institutions have access to Solana's speed and large liquidity, it has the potential to be a very powerful weapon.

Given that Solana has more than $4.7 billion in TVL—or 4.49% of all blockchain TVL—it is currently the fourth-largest blockchain network, according to DefiLlama data.

Next up, a Solana ETF?

According to Tristan Frizza, the founder of Zeta Markets, Solana's may be the next cryptocurrency to get a spot exchange-traded fund (ETF), in addition to growing institutional usage.

In a note, Frizza wrote:

"Along with BTC and ETH, Solana is regarded as one of the "big three" cryptocurrencies, and many analysts predict the release of a Solana ETF shortly. Solana is expected to be adopted more widely by merchants and institutions thanks to significant collaborations including PayPal, Stripe, Shopify Pay, and Visa."

In January, trillion-dollar asset manager Franklin Templeton hailed Solana for its monolithic approach to blockchain scalability, referring to it as a “powerful use case of decentralized blockchains” in an X post from January 17. This comment initially fueled hopes for a Solana-based exchange-traded fund (ETF).

June 2024, Cryptoniteuae

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