Ethereums Dominance Unchallenged: Sygnum Experts Assess the Future of Blockchain Rivalry with Solana

There are no compelling indications that Solana will surpass Ethereum as the preferred blockchain for institutional investors. This perspective is shared by experts from the Swiss crypto bank Sygnum.

The report notes that the current sentiment surrounding Ethereum «remains negative.» The market is primarily focused on «Solana’s high transaction volumes and its recent dominance in fee generation.»

«Setting aside sentiments, we believe that the medium-term outlook will primarily be influenced by the platforms chosen by traditional financial institutions to offer their products,» stated Sygnum.

Experts argue that factors such as «security, stability, and longevity,» along with higher yields, favor Ethereum. In fact, its network surpasses Solana in this aspect by nearly 2.5 times. The only exception was a brief period connected to the release of tokens by Donald Trump’s family, TRUMP and MELANIA.

«The market has consistently viewed Solana’s revenues as less stable, as they are heavily concentrated in the meme coin sector. This will limit its advantages,» Sygnum’s specialists emphasized.

Ethereum has faced criticism for stagnant on-chain activity on its base blockchain; the Dencun hard fork significantly reduced the costs of L2 networks, where transaction volumes have moved. This has led the market to perceive ETH as less valuable, according to experts.

However, Solana is facing a «comparable challenge» regarding its tokenomics, they added. The blockchain generates more fees on the first layer, but most of the revenue goes to validators and does not enhance the value of SOL.

«At present, it seems that Solana is not inclined to increase the token’s value, as a recent proposal to adjust the inflation rate, which would have had an appropriate effect, was ultimately rejected,» the experts noted.

They pointed out that Ethereum leads in options popular among governments, regulators, and financial institutions, such as tokenization, stablecoins, and DeFi.

The blockchain’s share in the RWA segment has reached 57%, while the L2 protocol ZKsync accounts for an added 20%. Solana’s figure does not exceed 3%.

«Although Ethereum’s share in the stablecoin market has declined since the beginning of the year, it still surpasses 50%, while Solana, despite doubling its market share, remains just above 5%,» the experts observed.

They found Solana’s advancement in decentralized finance the most compelling. In terms of TVL, the blockchain has increased its percentage in the segment from 9.5% to 11.5% since the start of the year, whereas Ethereum’s percentage has dropped from 63.5% to 55%.

«To date, all ‘Ethereum killers’ have failed to challenge the network’s dominance, and despite some of these projects bringing brilliant innovations that address real issues like scalability or compatibility, most have now faded into obscurity,» the Sygnum specialists concluded.

It is worth noting that in December 2024, Ethereum researcher Max Reznik stated that the project was «tired and burned out,» announcing his move to the Solana company Anza.

Conversely, one of Ethereum’s lead developers, Justin Drake, dismissed the threat posed by competitors like Solana to the blockchain’s position.