Bank of America believes that Solana could be the Visa of the digital world as the crypto network continues to cut into Ethereum market share. Solana is part of a class of blockchain networks that are coming online and offering scalability and low transaction fees and are attracting increasingly more users and investors, reports CoinDesk.
Solana launched in 2020 and has made huge strides in several areas of crypto, having completed over 50 billion transactions and greater than $11 billion in total value locked. To compare, Visa, the global leader in payments, notched 164.7 billion transactions from September 2020 to September 2021. For a blockchain that just launched, it is cutting hugely into the Ethereum market share.
The Solana network handles minting of NFTs (5.7 million to be exact so far) and is positioned perfectly to be used for gaming purposes and microtransactions.
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by several network performance issues since inception,” said Alkesh Shah, an analyst for Bank of America. “Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.”
The major bank believes that Solana and similar blockchain networks could whittle away at Ethereum’s dominance over the NFT and transactional marketplace, particularly as more developers engage in the space.
Investing in Solana With Grayscale
For investors who are looking for a way to gain exposure to Solana, Grayscale offers the Grayscale Solana Trust (SOL). The fund is benchmarked to the CoinDesk Solana Price Index and seeks long, passive exposure to Solana without cash, leverage, or rehypothecation.
The fund allows investors to gain exposure to Solana through a secure structure, and shares of SOL are eligible for inclusion in certain IRA, Roth IRA, and other accounts.
SOL allows investors to have shares that are titled to their name, auditable, easy for financial and tax advisors to account for, and easy to transfer to beneficiaries. The trust’s SOL is stored offline in cold storage with Coinbase.
The fund has an annual fee of 2.5%.
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