Bank of America says that Solana (SOL) could end up becoming the ‘Visa’ of the digital asset ecosystem.
Writing in a note to Business Insider, BofA analyst Alkesh Shah said that Solana could continue to take market share from Ethereum due to its more user-friendly design.
Shah said that the valuation gap between Solana and Etheruem presents an opportunity for SOL, as its differentiation is “proving successful.” BofA’s note reportedly highlighted Solana’s lower transaction fees, ease of use, and potential for scalability compared to other cryptocurrencies.
“These innovations allow for the processing of an industry-leading ~65,000 transactions per second with average transaction fees of $0.00025, while remaining relatively decentralized and secure,” Shah explained.
With the 5.7 million NFTs minted on the Solana network, plus 400 different projects current running on it, Shah says the fifth largest crypto asset by market cap is showing signs of “significant adoption” and the potential for more. He says Solana can become the “Visa of the digital asset ecosystem” with its optimized structure for micropayments.
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“These innovations allow for the processing of an industry-leading ~65,000 transactions per second with average transaction fees of $0.00025, while remaining relatively decentralized and secure,” Shah explained.
The analyst suggested that Ethereum’s priciness and lesser ability to scale compared to Solana could mean that it gets designated for “high-value transactions and identity, storage and supply chain use cases,” while Solana gets used for micropayments.
While known for sacrificing some decentralization compared to Ethereum and weathering multiple DoS attacks since its launch, Solana is still nearly 30,000% up from its lows of May 2020. SOL currently trades for $149 at the time of writing.
