In a May 8 blog post, Sygnum said that the current sentiment around Ethereum “remains poor,” with the market focused on Solana’s “transaction volumes and its recent dominance in fee generation.”However, Sygnum said “the medium-term outlook will primarily be shaped by traditional financial institutions’ platform choices to bring their product offerings,” not by sentiment.“We do not yet see convincing signs that Solana would be the preferred choice as Ethereum’s security, stability and longevity are highly prized,” it added.
Sygnum argued that institutions could choose Ethereum over Solana as the market has viewed the latter’s revenue generation as “less stable” due to being “highly concentrated in the memecoin sector.”“This will limit outperformance as it could be argued that the differential in valuation is accounted for by this difference in revenue sources,” the company said.
The company said Solana is leading Ethereum in market share for layer-1 fee generation, but “most of the fees are paid to validators and do not grow the value of the Solana token.”“In fact, when it comes to revenues, Ethereum still exceeds Solana 2- 2.5x,” Sygnum said.
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Author / Journalist: Cointelegraph by Jesse Coghlan
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