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Bank of America strategist Alkesh Shah says Solana could take market share from Ethereum and handle Visa-like transaction volumes.
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He points to scalability, low fees, and ease of use as key advantages that position Solana as a leading blockchain for micropayments, DeFi, and NFTs.
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Solana (SOL) price jumped nearly 10% to $157 before trimming gains on Thursday afternoon.
Bank of America has suggested that Solana could gradually capture market share from Ethereum, positioning itself as the “Visa of the digital asset ecosystem.”
Alkesh Shah, the bank’s crypto strategist, argues that Solana’s main advantages over Ethereum are threefold: much higher scalability, very low transaction fees, and greater ease of use.
In a research note cited by Business Insider, Shah said these characteristics could propel Solana to a level of adoption comparable to a payments giant like Visa.
Despite several network outages in recent months — which indicate Solana still faces operational challenges under heavy use — Shah believes the platform’s prospects are strong.
He wrote that “[Solana’s] high throughput, low cost, and ease of use” create a platform well suited to a range of real-world applications.
Beyond micropayments, the network is already seeing significant activity from consumers and developers in decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, and other Web3 projects.
In December, Arcane Research predicted that Solana and other layer-1 blockchains could outperform Ethereum in 2022.
“Visa of crypto” comparison
Solana is a proof-of-stake blockchain that launched in 2020, with SOL as its native token. Since its debut, SOL has seen substantial price appreciation and helped place Solana among the top blockchains by market capitalization.
Visa is a global payments company that settles billions of transactions each year; the firm reported processing over 164 billion transactions in a recent year.
By comparison, Solana’s network has recorded over 50 billion transactions, and the ecosystem has seen growth in NFTs and total value locked (TVL), which reached around 5.7 million and roughly $11 billion respectively.
Visa’s infrastructure can handle up to 24,000 transactions per second (TPS), while Solana’s theoretical capacity can reach up to 65,000 TPS. Ethereum’s base layer processes about 12 TPS on-chain and relies on layer-2 solutions to scale further.
Those performance figures give Solana a tangible advantage that could allow it to take market share from Ethereum. Shah cautioned, however, that the network’s speed and low costs come with trade-offs in decentralization and security.
Following the Bank of America commentary, Solana’s price briefly surged, making SOL one of the top gainers among the largest cryptocurrencies by market cap. The SOL/USD pair rallied more than 9% in early trading on Thursday before easing back from intraday highs near $157.
At the time of reporting, Solana was trading around $151.