The Layer-1 blockchain Solana can emerge in a “one-trick pony” for the generation of memecoin and trading, according to a recent chartered standard report.
According to a May 27 Standard Chartered Chartered Research reported with Cointelegraph, Solana is “dominant in areas that request high volume, low-transaction solutions” because of its design that values fast and inexpensive transaction confirmation. The report suggested that it had accidental consequences:
“So far, it is mostly memecoin trading, which is having most of Solana’s activity (as measured by ‘GDP’, which is the application income).”
The Standard Charter said the Memecoin Frenzy served as a stress test for Solana’s scalability but came to drawbacks due to volatility and speculation that were characteristic of such ownership. As the volumes of memecoin trading decrease, the bank warned that Solana could struggle to maintain momentum.
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Memecoin trading passes its climax
The report said that Solana -based activity -based activity passed its climax, and “the refusal of use and trading ‘cheap’ was not a great mix.” Bank suggested that Solana should be expanded to other sectors that require processing large volume of transactions cheaply and fast.
Each report, those sectors may include high-throughput financial apps and traditional consumer apps such as social media. However, the scale of such applications can take years, according to the bank, with the consequences for Solana:
“As a result, we expect Solana to be underperform Ethereum over the next two to three years, before being caught, at least in real terms.”
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Solana’s edge is fading
Solana has long been positioned as a fast and inexpensive layer-1 blockchain with smart contract support, competing directly with Ethereum. However, that edge can be narrow.
The Ethereum Layer-2 platforms have been caught in Solana in terms of average transaction costs since the Dencun network upgrade in March 2024. This change put pressure on Solana’s proposal as the cheapest high-throughput blockchain. Standard Chartered acknowledged that Ethereum’s modular design, which separates the availability of data, implementation and adoption, allows it to measure better while maintaining decentralization:
“The modular approach allows Ethereum to scale transactions at a low cost (post-den upgrade) while maintaining the security benefits of a highly decentralized mainnet blockchain.”
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