Here’s How Solana Can Reach 50% of Ethereum’s Market Cap: VanEck Research

Ethereum used to dominate almost every non-Bitcoin blockchain sector of the industry, but has gradually lost some of its grip on certain markets to competitors like Solana.

VanEck’s research department, MarketVector, decided to dig deeper into the battle between the two giants of Layer 1 to see what’s what.

Solana vs. Ethereum

The report, written by Martin Leinweber, highlights some important differences between the two. In some cases, such as the number of transactions, daily active users, and transaction fees, Solana takes the lead by a massive margin and predicts a bright future for the blockchain.

“When comparing Ethereum and Solana, the data is amazing. Solana processes 3,000% more transactions than Ethereum, has 1,300% more daily active users, and its transaction fees are almost 5 million percent cheaper. These these are monumental differences that show Solana’s potential efficiency and scalability advantages.

Given these statistics, it’s hard not to wonder why we haven’t seen a larger migration to Solana from Ethereum, especially from institutions.”

Still, Ethereum has the edge in other metrics, such as total value locked. In fact, the TVL of the world’s second largest blockchain exceeds 56%, according to data from DefiLlama, while Solana’s share is only 6%.

In terms of institutional adoption, Solana trails its older competitor, which received further validation in July of this year when the US SEC gave the green light to new Ethereum ETFs. Although its adoption rate has struggled, approvals still show that institutional investors are more hungry for ETH at the moment.

The landscape surrounding a Solana ETF is quite controversial in the United States. While other countries, such as Brazil, have already greenlit such products, BlackRock executives recently said, “It’s going to be a while before we see” a Solana ETF in the US.

Is SOL underrated?

Based on some of the metrics and developments mentioned above, MarketVector’s analysis suggested that the price of SOL may be undervalued compared to ETH. Leinweber claimed that if Solana “continues to surpass transaction volume and user participation,” its market capitalization could reach 50% of Ethereum’s.

Should this happen, SOL could rise to $330 given ETH’s current price and market cap of $2.62 billion and $315 billion, respectively.

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