- Institutional preference remains with Ethereum over Solana due to stability and security concerns, according to Sygnum.
- Most of Solana‘s revenue is driven by memecoin activity, making its income less stable compared to Ethereum.
- Solana could make gains if it secures more reliable revenue streams in areas like tokenization and stablecoins.
Solana has yet to show clear signs that it could surpass Ethereum as the blockchain platform of choice for institutional use, as reported by crypto banking group Sygnum on May 8. Sygnum stated that the primary reason is the instability of Solana‘s revenue, which is heavily driven by memecoin activity.
According to Sygnum‘s official blog post, market sentiment around Ethereum is currently low, with attention drawn to Solana‘s high transaction volumes and recent success in generating fees. However, the decision-making for institutional adoption, Sygnum explained, will depend more on which platform traditional financial institutions choose for their products.
“We do not yet see convincing signs that Solana would be the preferred choice as Ethereum’s security, stability and longevity are highly prized,” said Sygnum in its post. The company emphasized that Ethereum‘s revenue remains more robust, as Solana‘s earnings depend largely on activity in the memecoin sector, making them less stable.
The research highlighted that much of Solana‘s fee revenue goes to validators—the participants who process transactions on the network—and does little to increase the value of the Solana token itself. By comparison, Sygnum noted that Ethereum still earns two to two and a half times more than Solana despite Solana leading in raw fee generation.
Additional factors include Solana‘s “tokenomics,” or the structure and distribution of its cryptocurrency tokens. Sygnum suggested these are simpler to change than Ethereum‘s methods for scaling to support more transactions but noted that Solana has not recently moved to direct more benefits to its token holders.
Sygnum acknowledged that while Solana has increased the value locked in its decentralized finance (DeFi) protocols, it will need to generate steadier income—such as through tokenization (creating digital tokens representing real-world assets) and stablecoins (cryptocurrencies pegged to stable assets)—before it can meaningfully challenge Ethereum.
The report added that Ethereum holds a dominant position in use cases like tokenization, stablecoins, and DeFi, with significant support from government and financial regulators. Still, the recent shift in the Ethereum Foundation’s priorities, which now focus more on the base layer of the blockchain, may aid its position after a period of underperformance compared to Solana.
For detailed analytics and transaction data comparisons, see Dune Analytics.
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