Solana may be a memecoin ‘one-trick pony’ — Standard Chartered

Layer-1 blockchain Solana whitethorn beryllium evolving into a “one-trick pony” for memecoin procreation and trading, according to a caller Standard Chartered report.

According to a May 27 Standard Chartered probe study shared with Cointelegraph, Solana “dominates successful areas that request high-volume, low-transaction-cost solutions” owed to its plan prioritizing accelerated and inexpensive transaction confirmation. The study suggested this has had an unintended consequence:

“So far, this has been mostly successful memecoin trading, which accounts for the bulk of enactment connected Solana (as measured by ‘GDP’, which is exertion revenue).”

Standard Chartered said the memecoin frenzy served arsenic a accent trial for Solana’s scalability but came with drawbacks owed to the volatility and speculative quality of specified assets. As memecoin trading volumes decline, the slope warned that Solana whitethorn conflict to support momentum.

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Memecoin trading passed its peak

Standard Chartered said Solana-based memecoin enactment is past its peak, and “declining usage and trading ‘cheap’ are not a bully mix.” The slope suggested that Solana should grow into different sectors that necessitate processing ample volumes of transactions cheaply and quickly.

Solana decentralized speech volume. Source: Standard Chartered

Per the report, those sectors could see high-throughput fiscal apps and accepted user apps specified arsenic societal media. Still, scaling specified applications whitethorn instrumentality years, according to the bank, with dire consequences for Solana:

“As a result, we expect Solana to underperform Ethereum implicit the adjacent 2 to 3 years, earlier catching up, astatine slightest successful existent terms.”

Standard Chartered’s crypto people prices. Source: Standard Chartered

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Solana’s borderline is fading

Solana has agelong positioned itself arsenic a accelerated and inexpensive layer-1 blockchain with astute declaration support, competing straight with Ethereum. However, that borderline whitethorn beryllium narrowing.

Average transaction fees connected Solana and Arbitrum. Source: Standard Chartered

Ethereum layer-2 platforms person caught up with Solana successful presumption of mean transaction outgo since the Dencun web upgrade successful March 2024. This displacement has enactment unit connected Solana’s worth proposition arsenic the cheapest high-throughput blockchain. Standard Chartered acknowledged that Ethereum’s modular design, which separates information availability, execution and consensus, has allowed it to standard much efficiently portion preserving decentralization:

“The modular attack allows Ethereum to standard transactions astatine a debased outgo (post-Dencun upgrade) portion maintaining the information benefits of a highly decentralised mainnet blockchain.”

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