Recently, there has been a heated debate in the cryptocurrency community about whether Solana (SOL) can overtake Ethereum (ETH) as the leading smart contract blockchain. In this article, we will analyze the current market trends and on-chain metrics to determine if Solana has what it takes to flip Ethereum.
According to recent data, Solana (SOL) has rallied 70% against Ethereum (ETH) in 2024, with its native token emerging as a strong contender against Ether. Solana’s protocol fees, which are a small percentage of the transaction value collected to maintain and facilitate trade on the blockchain, are nearly two times that of Ethereum in November 2024. This suggests higher revenue for Solana compared to Ethereum in October and November 2024.
Another key metric is the transaction volume on decentralized exchange platforms (DEXes). In the case of Solana, DEX volume is nearly two times that of Ethereum in November, with Solana ranking higher in DEX volume by a relatively smaller margin in October. This translates to higher utility and adoption of one chain compared to the other, with Solana being preferred by traders on decentralized exchanges.
While Ethereum dominates in circulating stablecoin supply and total value of cryptocurrencies (TVL) locked on the chain, Solana struggles to compete in these metrics. However, with continued adoption and demand, Solana could overtake Ethereum in these metrics in the long-term.
So, can Solana flip Ethereum? The answer lies in Solana’s ability to overcome challenges and increase its ecosystem’s adoption. The addition of new stablecoins, such as Sky’s USDS stablecoin, could increase Solana’s DeFi liquidity and push its circulating stablecoin supply and TVL metric higher.
Technical indicators also suggest that Solana’s price trend is likely positive, with the SOL/ETH pair showing scope for further gains and a re-test of the all-time high at 0.079770. If Solana breaks past its all-time high and extends its gains, the SOL/ETH pair could target the 0.090000 level, 13% above its record high.
Predictions:
– Solana’s price trend is likely to follow Bitcoin closely, with a market correction in the latter potentially ushering a decline in SOL.
– Solana’s correlation co-efficient with Bitcoin is 0.98, suggesting a strong positive correlation between the two assets.
– Solana’s ecosystem is likely to continue growing, with the addition of new stablecoins and DeFi protocols increasing its adoption and utility.
– Ethereum’s beta plays, such as Layer 2 and Layer 3 tokens, are likely to struggle in the face of competition from alternatives like Solana.
– Crypto traders holding staking, re-staking, Layer 2, and 3 tokens are likely to observe unrealized losses on their portfolio as Ethereum struggles in the face of competition from alternatives like Solana.
– Solana’s price trend is likely to be positively impacted by its growing ecosystem and adoption, with a potential re-test of its all-time high and a breakthrough to the psychologically important $300 mark.
In conclusion, while Solana has made significant gains against Ethereum in recent months, it still has a long way to go before it can flip the leading smart contract blockchain. However, with its growing ecosystem and adoption, Solana is definitely a force to be reckoned with in the cryptocurrency space.
Disclaimer: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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