Fidelity recognizes Solana as a significant rival in the blockchain landscape compared to Ethereum
In a recent report, financial services giant Fidelity has shed light on the ongoing battle between Ethereum and Solana, two of the most prominent players in the cryptocurrency market.
The report suggests that Ethereum, with its anticipated hard fork, is set to improve functionality, scalability, and user security, maintaining its position as a secure, developer-robust foundation with deep liquidity and broad stablecoin use. Ethereum leads in developer activity and Total Value Locked (TVL), reflecting its largest and most established decentralized ecosystem with diverse DeFi and NFT projects, backed by a stable and secure network with a long operational track record.
On the other hand, Solana is expected to increase transaction throughput, making it an attractive choice for scalable, low-cost applications. Solana excels in transaction speed (thousands of TPS vs. Ethereum’s ~15-30 TPS) and extremely low fees (a fraction of a cent compared to Ethereum’s variable few dollars during congestion).
However, the report also highlights concerns about Solana's network reliability due to past outages and questions about centralization, as it relies on a novel Proof-of-History plus Proof-of-Stake consensus mechanism.
In terms of TVL and stablecoin supply, Ethereum dominates, supporting a robust DeFi economy and ecosystem maturity. Solana's TVL and stablecoin supply are growing rapidly, reflecting increasing adoption for economic transactions despite its shorter track record.
Notably, Solana's dApp revenue reached a record $365 million in November, and its trading volume hit an all-time high of $243 billion in the same month, attributed largely to the meme-coin phenomenon. However, much of the revenue spike is believed to be driven by meme-coin trading, which may not reflect the long-term potential of the network.
The report also notes the SEC's potential role in solidifying Ethereum's lead by allowing staking options within an ETF, while the approval of a similar product for Solana could potentially level the playing field.
In summary, Fidelity frames Ethereum as a secure, developer-robust foundation with deep liquidity and broad stablecoin use, while positioning Solana as a high-speed, low-cost platform propelling new app development and transaction volume. However, the report suggests that Ethereum's strong fundamentals may be more important than Solana's speed and low fees in the long run.
As the bull market advances, investors are expected to pay closer attention to this dynamic, with both networks anticipated to undergo significant upgrades throughout 2025, keeping the race between Ethereum and Solana an exciting one to watch.
Investing in Ethereum's technology offers a secure foundation with deep liquidity and broad stablecoin use, making it an attractive choice for those interested in the finance sector. On the other hand, Solana's technology excels in providing scalable, low-cost applications, particularly in transaction speed and fee reduction, which could attract businesses seeking such features.
