- Solana is attracting major financial institutions, enhancing its position as a leading blockchain for institutional use.
- PayPal, Visa, and others are integrating with Solana for its scalability and low transaction costs.
- Experts foresee Solana potentially becoming the next major cryptocurrency to offer a spot ETF.
Solana, now the fourth-largest blockchain by total value locked (TVL), is rapidly emerging as a favorite among financial institutions aiming to “future-proof” their services. Robinson Burkey, co-founder and chief commercial officer of Wormhole Foundation, emphasized that institutions like PayPal, Stripe, and Visa are increasingly turning to Solana to stay ahead in the digital finance landscape.
Institutional Integrations and Adoption
On May 28, PayPal expanded its PayPal USD (PYUSD) stablecoin to the Solana network, marking its first move beyond the Ethereum ecosystem. This integration aims to provide Solana users with cost-effective transactions using PYUSD, thereby broadening the stablecoin’s everyday utility.
Earlier, in September 2023, Visa had also integrated its USD Coin (USDC) on Solana, making it the second network to support the stablecoin after Ethereum. These moves by industry giants underscore Solana’s growing appeal in the financial sector.
Solana’s Scalability and Cost Efficiency
Solana’s high transaction throughput and low costs are key factors driving its institutional adoption. The network can maintain up to 65,000 transactions per second (TPS) with an average cost of just $0.0025 per transaction. This efficiency significantly outpaces Ethereum, which processes around 15 TPS with transaction fees that can exceed $50 during high congestion periods.
Potential for a Solana ETF
The potential for a Solana-based spot exchange-traded fund (ETF) is gaining traction among analysts. Tristan Frizza, founder of Zeta Markets, pointed out that Solana is often considered one of the top three cryptocurrencies alongside Bitcoin and Ethereum. He suggested that with major partnerships in place, merchant and institutional adoption of Solana is likely to continue growing.
Franklin Templeton, a trillion-dollar asset manager, sparked initial hopes for a Solana ETF in January by praising its approach to blockchain scaling. The firm described Solana as a “powerful use case of decentralized blockchains.”
Future Prospects
As Solana continues to attract significant institutional interest, its position within the blockchain ecosystem strengthens. With over $4.7 billion in TVL, accounting for 4.49% of the total TVL across all blockchains, Solana’s potential for further growth appears robust. Its combination of high scalability, low transaction costs, and growing institutional support sets the stage for continued expansion and potential new milestones in the financial world.
