Solana's Rising Challenge To Ethereum Gains Momentum
According to DLNews, Solana, once labeled the 'Ethereum-killer,' is making significant strides in the blockchain arena, positioning itself as a formidable competitor to Ethereum. Analysts are now looking towards 2025 as a pivotal year for Solana to challenge Ethereum's dominance. Karim Saber, an analyst at 21.co, suggests that networks generating higher economic value could see their valuations double or triple. Solana's native coin, SOL, has surged by 130% this year, reaching an all-time high of $263, outperforming Ether, which has seen a 68% increase.
Solana's appeal is bolstered by its ability to host popular memecoins, enhancing its brand among retail investors. Francisco Oliva-Velez from Plaintext Capital highlights Solana's advantages in speed, scalability, and ecosystem development. Despite Ethereum's larger scale, with a total value locked (TVL) of $57 billion compared to Solana's $9.4 billion, Solana is gaining ground. Its TVL has increased by nearly 80% in the fourth quarter, outpacing Ethereum's 61% growth.
Technological improvements and strategic business moves have helped Solana overcome previous challenges, such as network outages. With the capability to process 65,000 transactions per second, compared to Ethereum's 15, Solana is attracting institutional interest. Eliézer Ndinga from 21.co notes that Solana is drawing attention from 'smart money.' Several firms, including Bitwise and VanEck, have filed to launch Solana ETFs, while asset managers have reduced their Ethereum holdings.
The future remains uncertain as to whether Solana can dethrone Ethereum. Ethereum continues to attract investor interest, with inflows into Ethereum ETFs increasing recently. Analysts predict Ether could reach $10,000 by 2025. However, Solana is also expected to make significant gains, with predictions of SOL reaching $1,000 next year. Solana's upcoming mobile phone launch in 2025 and its appeal to retail users, particularly through its user-friendly interface and support for memecoins, are seen as key strengths. Saber notes that Solana's retail appeal is a major asset, with nearly a fifth of portfolio managers recognizing its benefits. The competition between Solana and Ethereum is intensifying, with both platforms poised for potential growth in the coming years.