- PayPal has added its stablecoin, PYUSD, to the Solana blockchain.
- This move offers lower transaction costs and faster processing times.
- Users will experience unified balances across different networks.
- Solana is now the most used blockchain for stablecoin transfers.
- An upgrade called Firedancer aims to improve Solana’s reliability.
PayPal has announced that its stablecoin, PayPal USD (PYUSD), will now be available on the Solana blockchain. This marks a significant step as it moves beyond Ethereum for the first time.
Benefits of Using Solana
Solana offers several advantages over Ethereum.
It can process up to 65,000 transactions per second at a cost as low as $0.0025 per transaction.
In contrast, Ethereum handles only about 15 transactions per second with fees ranging from $1 to $50 during busy periods. This means users can expect quicker and cheaper transactions on the Solana network.
Jose Fernandez da Ponte, PayPal’s senior vice president of blockchain, stated that this expansion aligns with their goal of enabling a digital currency designed for everyday use in commerce and payments.
User Experience and Market Data
PayPal and Venmo wallet users will benefit from a chain-agnostic experience. This means their PYUSD balances will be unified regardless of which network holds their assets.
Data shows that since last year, Solana has become the most used blockchain for stablecoin transfers with a volume reaching $1.5 trillion. In comparison, Ethereum saw $885 billion in transfer volume over the same period.
However, it’s not all smooth sailing for Solana; it faces challenges like recurring network outages. The latest outage occurred on February 9th when transactions were down for nearly five hours.
An upcoming upgrade named Firedancer aims to increase both reliability and scalability of the network.
What Are Stablecoins
Stablecoins are cryptocurrencies pegged to more stable assets like fiat currencies, such as the U.S. dollar. They aim to maintain a constant value, making them suitable for daily transactions.
PayPal launched PYUSD in August 2023 in collaboration with Paxos Trust Company, initially issuing it only on Ethereum as an ERC-20 token.
PYUSD is backed by U.S. dollar deposits, short-term Treasuries, and cash equivalents.
According to DeFiLlama, Tether (USDT) controls nearly 70% of the market capitalization, approximately $111 billion, while PYUSD is worth around $272 million.
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