A recent report from Pantera Capital highlighted Solana’s (SOL) potential to become a dominant player in the blockchain ecosystem, drawing parallels between its monolithic architecture and Apple’s macOS.
Written by General Partner Franklin Bi, Portfolio Manager Cosmo Jiang, and Investment Analyst Eric Wallach, the report delves into Solana’s rising influence and its implications for the future of blockchain technology.
According to the report, the blockchain ecosystem is expected to converge around a few dominant platforms, driven by developer preferences, and Solana’s integrated approach is poised to capture a significant portion of this consolidation.
Pantera called developers the “root” of the blockchain ecosystem, shaping crypto broadly and acting as customers who build applications that drive demand for blockspace. As a result, blockchain use could converge around a small oligopoly of chains, similar to Windows, MacOS and Linux in the desktop computer market.
Monolithic architecture
According to Pantera, Solana’s monolithic design provides a seamless user experience, faster innovation and improved security, making it an attractive choice for developers and end users alike. Solana’s capabilities enable innovative applications across industries, from content distribution and decentralized mapping to capital-efficient financial markets.
Historically, Ethereum has been the leading platform for blockchain development, accounting for 70-80% of developer activity. However, Solana is rapidly gaining ground, the report said.
It compared Solana’s rise to Apple’s breakthrough against Microsoft in the early desktop computer market, highlighting its monolithic architecture as a key differentiator. This approach allows the network to optimize every part of its blockchain, offering significant advantages over modular blockchains such as Ethereum and Cosmos.
Pantera said Solana’s similar approach provides a seamless UX that eliminates the need to bridge chains and provides faster innovation and product upgrades. It also offers a high degree of security thanks to its single-chain design, similar to Apple’s “tight control over its ecosystem.”
Grow all around
Solana has seen growth in other categories. Pantera noted that Solana’s number of unique addresses increased from 14,000 in October 2020 to 1.34 million in March.
Priority fees have increased from $100,000 per month in mid-2023 to $60 million in March, indicating the “intensity of demand for block space on Solana.”
Solana accounted for 85% of all new tokens on DEXs in May, up from 50% a year ago, amid “explosive growth” driven by memecoin activity. Pantera said this is a sign of strong retail use.
The network’s share of DEX volumes has grown from 0% in early 2021 to 24% in May, representing more than 60% of incremental DEX volume during the month.
Meanwhile, the top wallet on the network, Phantom, briefly rose to the top spot in several iOS app store categories, becoming the most downloaded app in late May and early June. Pantera called this a “remarkable achievement” and a sign of mainstream adoption, again linking it to the memecoin trading boom.
Solana’s total economic value, or transaction fees plus maximum extractable value (MEV), has surpassed 32% of the same value on Ethereum. The trend has “real economic value for SOL token holders” and attracts stakers. Moreover, it will improve decentralization and security.