Solana emerged as an institutional favorite following the launch of PayPal’s USD.
The fourth largest blockchain in terms of Total Value Locked (TVL), Solana is becoming a leading network in institutional adoption.
According to Wormhole Foundation co-founder and chief business officer Robinson Berkey, more and more financial institutions will integrate with the Solana blockchain.
Burke wrote in a research note shared with Cointelegraph:
“Solana and institutions make sense. Industry leaders like PayPal, Stripe and Visa need to future-proof their offerings. The best way to do that is to connect with their most forward-thinking users on the platforms they embrace. You'll likely see many more institutional opportunities for Solana in the coming years.”
On May 28, PayPal expanded its PayPal USD (PYUSD) stablecoin to the Solana network, marking the first step beyond the Ethereum ecosystem to the blockchain.
The integration will allow Solana users to conduct cheap transactions on the network using PYUSD, extending the stability of the coin to everyday purchases.
In September 2023, global payments giant Visa launched USD Coin (USDC) on the Solana blockchain, the second network to support a stablecoin after Ethereum.
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Solana to receive more institutional adoption – Fireblocks
Solana is one of the most scalable blockchain networks capable of handling large volumes of transactions.
Solana can theoretically handle up to 65,000 transactions per second (TPS) at an average transaction cost of $0.0025, higher than Ethereum's 15 TPS and higher gas fees that start at just over $1 but can reach up to $50 during network congestion.
According to Ron Goldie, Vice President of Payments at FireBlocks, Solana's infrastructure can easily integrate the current flow of traditional payment institutions, leading to greater institutional adoption.
“With crypto transfers, a basic payment requirement for large-scale processors, we'll see more names adopting blockchain into their flows. The key, as I see it, is making sure your blockchain can support compliance, regulation and privacy “under the hood” payment requirements.
Adding a confidential transfer feature could open up more institutional partnerships for Solana, Goldie added.
“To do this, in addition to speed and wide fluidity, [Solana] It can be a sharp tool in the hands of payment institutions.
According to Defillama data, Solana is currently the fourth largest blockchain network with more than $4.7 billion in TVL, accounting for 4.49% of the total TVL across all blockchains.
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Is Solana ETF Next?
In addition to increasing institutional adoption, Solana (SOL) could be the next cryptocurrency to acquire a spot exchange-traded fund (ETF), according to Zeta Markets founder Tristan Freeza.
Frieza wrote in a note shared with Cointelegraph:
“Solana is seen as one of the ‘big three' cryptos along with BTC and ETH, with many analysts expecting a Solana ETF soon. With major partnerships like Visa, Stripe, Shopify Pay and PayPal, merchant and institutional adoption of Solana can grow.”
Prospects for a Solana-based ETF were first raised on Jan. 17 X. Trillion-dollar asset manager Franklin Templeton praised Solana for her monolithic approach to blockchain, calling it a “powerful use case for decentralized blockchains” on Jan. 17 X. Post.
Crypto investor and CNBC's Fast Money trader Brian Kelley speculates that Solana could be the next crypto to gain a spot ETF in the United States.
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