Ethereum‘s infrastructure for smart contract-based decentralized applications has so far been unmatched in the blockchain industry, primarily due to its first-mover advantage. However, this dominance has been waning significantly over the past couple of years with the emergence of several alternative layer 1 networks that offer similar features to Ethereum, often at a lower price and higher speed.
Coinbase expanding base
The prominence of its rivals has now begun to come to the forefront, most recently highlighted in Coinbase’s decision to list Solana-based tokens. This marks a sharp exit from its earlier focus on exclusively Ethereum based or other Layer 1 tokens.
The top cryptocurrency exchange has now begun accepting inbound transfers of two Solana ecosystem tokens, FIDA and ORCA, as per a statement from the firm. Both of these are Solana Program Library (SPL) tokens, which are equivelant to Ethereum’s ERC-20 tokens. They belong to decentralized exchanges Bonafide and Orca, which are built on Solana to facilitate trade for Solana-based assets.
Inbound transfers for Bonfida (FIDA) and Orca (ORCA) are now available on @Coinbase and @CoinbaseExch in the regions where trading is supported. Trading is not enabled at this time. Trading will begin on or after 9AM PT on Tuesday, February 1, if liquidity conditions are met. pic.twitter.com/0dtwx0CcgD
— Coinbase Assets (@CoinbaseAssets) January 31, 2022
The development can be viewed as another trophy for Solana, which is often touted as one of the primary ETH-killers in the market. This follows rumors about NFT marketplace OpenSea testing the integration of NFTs minted on Solana, along with its primary wallet Phantom. When it comes to listings, OpenSea too has followed a strictly Ethereum focused approach until now.
Top crypto platforms levitating towards Solana could very well have been fueled by the bullish outlook many have painted for the platform’s future. Even the Bank of America, in its latest statement, had compared Solana to payments giant Visa, claiming that the network could soon achieve that level in the crypto indsutry by beating Ethereum.
Regardless of the optimism, Solana’s infrastrcuture still remains nascent compared to the Etherverse. The top ERC-20 include the likes of Shiba Inu and Polygon’s Matic, both of which have a market capitalization of over $10 billion each. Compared to that, the top SPL tokens include RAY and MNGO, that have a market capitalization of around $312 million and $151 million respectively. FIDA’s market cap itself stood at around $133 million at the time of writing.
Moreover, Solana’s continued outage issues, similar to those of Ethereum, have also dwindled user’s belief in its ability to solve the latter’s congestion issues.
Coinbase itself has acknowledged this clear lag in the past, with its institutional arm claiming in a report that while Ethereum’s rising gas fee has facilitated the success of alt L1s like Solana, which “have made DeFi related transactions uneconomical”, the network could continue to hold its position as the dominant smart contract platform. This is mainly due to ETH’s efforts to make the platform more scalable and sustainable.