Solana, the fourth-largest blockchain in terms of total value locked (TVL), is emerging as a top network for institutional adoption.
More and more financial institutions are looking to integrate with the Solana blockchain to ensure the longevity of their services, as stated by Robinson Burkey, co-founder and chief commercial officer of Wormhole Foundation.
In a research note shared with Cointelegraph, Burkey mentioned that on May 28th, PayPal made a significant move by expanding its PayPal USD (PYUSD) stablecoin to the Solana network. This marked the first time PayPal had ventured beyond the Ethereum ecosystem and will allow Solana users to carry out cost-effective transactions using PYUSD, enhancing the stablecoin’s usability for everyday purchases.
In September 2023, global payments giant Visa introduced USD Coin (USDC) on the Solana blockchain, making it the second network after Ethereum to support the stablecoin.
Solana is recognized as one of the most scalable blockchain networks capable of handling large transaction volumes. With a theoretical throughput of up to 65,000 transactions per second (TPS) and an average transaction cost of $0.0025, Solana surpasses Ethereum’s 15 TPS and significantly higher gas fees ranging from $1 to $50 during network congestion.
According to Ran Goldi, the vice president of payments at Fireblocks, Solana’s infrastructure is easily adaptable to the existing flows of traditional payment institutions, leading to increased institutional adoption. Goldi also suggested that incorporating a confidential transfers feature could further enhance Solana’s appeal to institutional partners.
DefiLlama data shows that Solana currently ranks as the fourth-largest blockchain network with over $4.7 billion in TVL, representing 4.49% of the total TVL across all blockchains.
Aside from the growing institutional adoption, there is speculation that Solana (SOL) could be the next cryptocurrency to have a spot exchange-traded fund (ETF), according to Tristan Frizza, the founder of Zeta Markets.
Frizza noted in a statement shared with Cointelegraph that hopes for a Solana-based ETF were initially raised in January, following commendation from trillion-dollar asset manager Franklin Templeton for Solana’s innovative approach to blockchain scaling, calling it a “powerful use case of decentralized blockchains.”
Crypto investor and CNBC Fast Money trader Brian Kelly also suggested that Solana might be the next cryptocurrency to receive a spot ETF in the United States.