Solana May Reach $330 and ETH Market Cap 50% – VanEck Research
A Sept. 25 VanEck report predicts Solana (SOL) to balloon to $330 and balloon to 50% of Ethereum's (ETH) current market capitalization, driven primarily by Solana's superior speed and transaction processing metrics.
The report cites Solana's throughput, which can handle thousands of transactions per second (TPS) and is 3,000% higher than Ethereum's TPS. Solana's daily active user count is 1,300% higher than Ethereum, and transaction fees are nearly 5 million percent cheaper on the Solana network.
The authors of the report argue that Solana's speed and cost efficiency will give it a big boost over Ethereum for payments and remittances. Stablecoins in particular have been cited as a key driver of decentralized finance, leveraging Solana's advanced process metrics to pass cost savings to consumers.
Solana transactions per second measurements. Source: Solana Compass
Retail investors were “slowly waking up” to Solana's potential to challenge Ethereum as a smart contract platform, the authors said, and institutional investors were confused by Solana's benefits. The report theorized that a possible reason for the delay in institutional adoption could be reluctance to switch from blue-chip assets like ETH and adopt the younger Solana.
Related: Solana TVL falls, but will SOL price react negatively?
VanEck Analyzes Ethereum's Catastrophic Price Action
In early September 2024, VanEyck published a report detailing the factors that are depressing the price of Ethereum. According to VanEck's analysis, Ethereum's poor price performance is mainly driven by value extraction from Ethereum's Layer-2 networks.
The explosion in Ethereum Layer-2 scaling solutions follows changes made in the Ethereum Dencun update in March 2024, which significantly reduced transaction fees for Ethereum Layer-2 networks.
Ethereum Network Payments April 2024-September 2024. Source: Token Terminal.
The massive growth in these secondary projects and the drastic reduction in transaction fees has resulted in a 99% drop in Ethereum Layer-1 revenues since March 2024.
VanEek cited user migration to faster layer-1 networks like Solana and Sui ( SUI ) as another major factor holding down Ethereum's price and trading revenue. According to Van Eyck's report, Ethereum still enjoys a first-mover advantage, but this advantage is eroding rapidly.
Magazine: Proposed Change Could Save Ethereum From L2's ‘Roadmap to Hell'
