A recent report by 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.
Authored 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 share of this consolidation.
Pantera called developers the “root” of the blockchain ecosystem, shaping crypto broadly and acting as customers who build applications that drive blockspace demand. 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 architechture
According to Pantera, Solana’s monolithic design offers 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 various sectors, 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 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 component of its blockchain, offering significant benefits over modular blockchains like Ethereum and Cosmos.
Pantera said Solana’s similar approach provides a seamless UX that eliminates the need to bridge between chains and offers faster innovation and product upgrades. It also provides high security due to a single-chain design similar to Apple’s “tight control over its ecosystem.”
Growth all around
Solana has seen growth in other categories. Pantera noted Solana’s unique address count rose from 14,000 in October 2020 to 1.34 million as of March.
Priority fees have grown from $100,000 monthly in mid-2023 to $60 million in March, signifying 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 usage.
The network’s share of DEX volumes has grown from 0% in early 2021 to 24% in May — capturing over 60% of incremental DEX volume during the month.
Meanwhile, the top wallet on the network, Phantom, briefly 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 mainstream adoption, relating it once again to the memecoin trading boom.
Solana’s total economic value, or transaction fees plus maximum extractable value (MEV), has surpassed 32% of the same metric on Ethereum. The trend has “real economic value capture for SOL token holders” and attracts stakers. Additionally, it will improve decentralization and security.