One report Pantera Capital recently highlighted Solana’s potential to become a dominant player in the blockchain ecosystem, drawing parallels between its monolithic architecture and Apple’s macOS.
Produced by General Partner Franklin Bi, Portfolio Manager Cosmo Jiang and investment analyst Eric Wallach, the report delves into Solana’s growing 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 preference, and Solana’s integrated approach is poised to capture a significant share included in this merger.
Pantera calls developers the “roots” of the blockchain ecosystem, shaping cryptocurrencies at large and serving as customers building applications that drive demand for block space. Therefore, blockchain usage is likely to be concentrated around a small oligopoly of chains, similar to Windows, MacOS and Linux in the desktop market.
Monolithic architecture
According to Pantera, Solana’s unibody design delivers a seamless user experience, faster innovation and enhanced security, making it an attractive choice for developers and end users alike. Solana’s capabilities are enabling innovative applications across a variety of domains, from content distribution and decentralized mapping to capital-efficient financial markets.
Historically, Ethereum has been the leading platform for blockchain development, commanding 70-80% of developer activity. However, Solana is quickly gaining ground.
The report compares Solana’s rise to Apple’s foray against Microsoft in the early desktop market, highlighting its monolithic architecture as a key differentiator. This approach allows the network to optimize every element of the blockchain, providing significant benefits over modular blockchains like Ethereum and Cosmos.
Pantera says Solana’s similar approach provides a seamless UX that eliminates the need for chain-to-chain connections and enables innovation and faster product upgrades. It also offers high security thanks to a single-chain design that resembles “Apple’s tight control over the ecosystem.”
Growth 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 increased from $100,000 monthly 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” fueled by memecoin activity. Pantera said this is a sign of strong retail usage.
The network’s share of DEX volume increased from 0% at the beginning of 2021 to 24% in May – accounting for more than 60% of the increase in DEX volume during the month.
Meanwhile, the network’s leading wallet, Phantom, quickly rose to the top spot in various iOS app store categories and became the most downloaded app in late May and early June. Pantera called this a “remarkable feat” and a sign of widespread adoption, again linking it to the memecoin trading boom.
Solana’s total economic value, or transaction fees plus maximum extractable value (MEV), has surpassed the same metric on Ethereum by 32%. This trend “captures real economic value for SOL token holders” and attracts stakers. Additionally, it will improve decentralization and security.
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