Dragonfly General Partner Rob Hadick believes that Solana and Ethereum are likely to grow alongside each other in tokenization, rather than at each other’s expense.
During his Wednesday appearance on Squawk Box, he was asked which blockchain would rise like Facebook or decline like MySpace, to which he answered, “They are both Facebook.”
He added that with tokenization growing and more economic activity moving on-chain, multiple blockchains can coexist successfully in the same space, commenting, “You can’t just have one blockchain.”
Each blockchain will have distinct use cases
Hadick recognized that ETH has more stablecoins and greater on-chain activity than Solana, but argued that the latter also handles higher trading volumes, thus enhancing trading efficiency. He explained, however, that no single blockchain is likely to dominate the market completely, due to scaling limitations.
He noted, “I think we’re going to see different use cases on different blockchains,” recognizing the potential for new entrants to gain market share.
So far, Ethereum’s market, including stablecoins, stands at $183.7 billion, dwarfing Solana’s $15.9 billion, as per RWA.XYZ analysis. Additionally, more institutions have recently adopted the Ethereum network, including JPMorgan, which could drive mass adoption and increase the network’s advantage over Solana.
Wall Street’s BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), Fidelity’s Treasury Digital Fund (FYHXX), and now, JPMorgan’s OnChain Net Yield Fund (MONY), have now launched tokenized MMFs on Ethereum.
Nonetheless, both Ethereum and Solana must contend with competition from private networks, although many tokenization projects are currently opting to remain blockchain-agnostic. Ctrl Alt CEO Matt Ong commented on the current market preferences, “We’re seeing a lot of interest in the private networks from the big banks. But I think outside of that, there is still a massive push towards public [blockchains].”
Crypto platforms transition from Ethereum to Solana
Some crypto platforms have also been shifting between Ethereum and Solana. In October, the Fantasy sports platform Sorare transitioned from Ethereum to Solana, aiming for better scalability, lower fees, and a more open ecosystem. It moved more than 10 sports games and their associated cards. Nevertheless, Sorare CEO Nicolas Julia noted that he still trusts Ethereum, even as he referred to the change as an “upgrade.”
Additionally, in 2023, the Render Foundation reported that it had migrated its core infrastructure from Ethereum to Solana, allocating up to 1.14 million RNDR tokens for the transition.
Earlier this year, Mike Novogratz’s Galaxy Digital also exchanged $100 million worth of ether for Solana’s SOL. At the time, analysts speculated, the company made the move due to Ethereum’s “structural decline.” Then, in September, the company bought over $700 million in Solana in just two days for its SOL treasury investment in Forward Industries.
At the time, the firm even described Solana as “uniquely positioned to power the next generation of capital markets.” Novogratz even commented, “You’ve got a blockchain that’s now fast enough, tailor-made to be the blockchain for financial markets.”
Coinbase Asset Management president Anthony Bassili, in November, noted that with Bitcoin and Ether dominating crypto portfolios, Solana could take third place after them.
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