Standard Chartered has warned that Solana (SOL) could underperform Ethereum (ETH) as waning meme-coin activity—previously a major driver of on-chain Solana volume—loses momentum.
Although Solana has demonstrated technical strengths, particularly during the recent meme-coin trading boom, the bank sees a risk of underutilization as seasonal trends shift.
Geoffrey Kendrick, head of digital assets research at the bank, argues that broader adoption of Ethereum and institutional partnerships position it more favorably for sustained growth.
Ethereum benefits from broader use cases
Solana is often promoted as a faster, cheaper alternative to Ethereum, capable of handling high transaction volumes at low cost.
However, Standard Chartered notes that much of Solana’s recent activity was driven by short-term meme-coin trading—a sector known for volatility and limited utility.
With enthusiasm for meme coins cooling in 2025, Kendrick expects a potential utilization gap for Solana before other applications—such as decentralized finance (DeFi), gaming projects, or social media integrations—reach critical mass.
The bank highlights Ethereum’s advantage in its diversified user base, which includes enterprise-grade applications, financial products, and ongoing smart contract development.
On-chain analytics support this view. Earlier this year, Ethereum surpassed Solana in decentralized exchange (DEX) trading volume after a collapse in activity on Raydium (RAY) and Pump.fun, two of Solana’s most active meme-coin platforms.
This shift underscored Ethereum’s dominance across several blockchain sub-sectors.
Market sentiment reflects short-term risks for Solana
Investors appear to be responding to these signals. In February, market participants began reducing exposure to Solana-based assets due to uncertainty about the future of meme-coin projects and delays in scaling native Solana protocols.
Standard Chartered says these concerns are being priced into market forecasts, particularly in projections for fee revenue and new user adoption.
One key metric is Solana’s funding rate. According to blockchain data firm Glassnode, Solana currently shows a negative funding rate of -0.0002%—the only negative figure among the top 10 non-stablecoin cryptocurrencies by market capitalization.
A negative funding rate means traders holding short positions pay fees to maintain those positions, typically indicating rising downward pressure on price.
That said, a negative funding rate can be a contrarian signal. Investors may anticipate a short squeeze, where a sudden upward price move forces shorts to cover, potentially triggering a sharp rally.
BeInCrypto reports institutional accumulation of SOL in May, suggesting long-term investors may still see value in Solana even if its short-term performance lags Ethereum.
Analysts say Ethereum remains the dominant Layer 1
While Solana has shown rapid growth and solid technical infrastructure, analysts at IntoTheBlock believe the network still faces substantial challenges before it can seriously threaten Ethereum’s dominance.
The research group concluded that although Solana can continue to expand and target niche applications, overtaking Ethereum is a long-term objective rather than an imminent milestone.
Ethereum’s integration with traditional finance, broad developer support, and upgrades such as the move to proof-of-stake have reinforced its role as the leading blockchain for decentralized applications.
Until a new wave of real-world Solana use cases materializes, Standard Chartered expects the network’s price and on-chain activity may continue to follow Ethereum.
As the market matures, both blockchains could find room to grow, but in the near term Ethereum’s wider ecosystem and investor confidence give it an edge, according to the bank’s latest analysis.