Introduction
Sygnum Bank, a digital-asset banking group regulated in Switzerland and Singapore, recently published a report titled "Is Solana Overtaking Ethereum?" This analysis has reignited discussions about the competitive dynamics between the two leading smart-contract platforms. While Ethereum maintains dominance in institutional adoption and revenue generation, Solana’s rapid growth in transaction volume and market sentiment suggests a shifting narrative.
Key Findings from Sygnum’s Report
Revenue and Fee Generation
- Ethereum retains a clear lead in protocol revenues, generating 2–2.5× more income than Solana.
- Solana dominates fee generation but struggles to convert this into sustainable protocol income, except during niche events (e.g., Trump family token issuances).
Market Sentiment and Narrative
- Solana’s retail-friendly ecosystem and lower transaction costs have fueled a surge in retail activity, particularly in memecoins.
- Ethereum’s focus on scalability (e.g., rollups) has improved its technical roadmap but led to underperformance in token value (-5–10% vs. SOL).
Institutional Adoption
- Ethereum hosts 93% of BlackRock’s BUIDL fund assets, emphasizing its "security, decentralization, and credibility."
- Solana’s share in tokenized assets remains below 3%, though its stablecoin market share has doubled YTD to 5%.
Critical Metrics Compared
| Metric | Ethereum | Solana |
|-----------------------|---------------|---------------|
| Protocol Revenue | 2–2.5× higher | Lagging |
| DeFi TVL Share | 55% (down from 63.5%) | 11.5% (up from 9.5%) |
| Institutional Custody | Dominant (e.g., BUIDL) | Minimal |
| Retail Activity | Declining | Surging (memecoins) |
Challenges for Both Chains
Ethereum’s Hurdles
- Layer-2 Fragmentation: Rollups divert activity from the main chain, reducing ETH’s perceived value.
- Poor Sentiment: Despite fundamentals, ETH’s price has underperformed SOL.
Solana’s Risks
- Revenue Concentration: Over-reliance on volatile memecoin transactions.
- Governance Limits: Recent rejection of an inflation-schedule proposal (akin to ETH’s fee burn).
FAQ Section
Q1: Can Solana replace Ethereum?
A: Unlikely in the short term. Ethereum’s institutional entrenchment and revenue stability provide a moat Solana lacks.
Q2: Why is Solana’s fee revenue not translating to protocol income?
A: Most fees compensate validators rather than accruing value to SOL tokens.
Q3: What’s Ethereum’s strategic pivot?
A: Prioritizing scalability via rollups and clarifying its value proposition to institutions.
👉 Explore Sygnum’s full report here