Solana’s Growth Is Real, But Is It Sustainable?

Solana vs. Ethereum: Which Blockchain Will Win Finance?

Solana– Crypto bank Sygnum has expressed skepticism about SOL overtaking Ethereum as the go-to blockchain for institutions, citing concerns over revenue stability and tokenomics. In a blog post published on May 8, Sygnum stated:

We do not yet see convincing signs that Solana would be the preferred choice as Ethereum’s security, stability and longevity are highly prized.

While Ethereum is facing poor market sentiment, SOL has recently outpaced Ethereum in transaction volumes and fee generation. However, Sygnum emphasizes that institutional adoption will depend on long-term platform reliability — not hype or short-term metrics.

Memecoin Reliance Raises Questions

Sygnum raised concerns about SOL’s current revenue model, noting:

The market has viewed [Solana’s] revenue generation as less stable due to being highly concentrated in the memecoin sector.

They argue that this limits Solana’s institutional appeal, as traditional financial players often prioritize predictable and diversified income sources.

Tokenomics Remain a Challenge

SOL’s tokenomics were also highlighted as a weak point. According to Sygnum:

Most of the fees are paid to validators and do not grow the value of the Solana token.

Even though SOL outperforms Ethereum in L1 fee market share, Ethereum still leads in total revenue by approximately 2 to 2.5 times. Sygnum also noted the community’s rejection of a March proposal to reduce SOL’s inflation rate as a sign that Solana is not prioritizing token value growth.

Room for Growth in Stable Use Cases

Despite these concerns, Sygnum acknowledged SOL’s progress in DeFi and suggested that if it secures stable revenue streams through sectors like stablecoins and tokenization, it could narrow the gap with Ethereum. Still, Ethereum maintains dominance in use cases favored by regulators and institutions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.