Solana (SOL), which is currently the seventh largest cryptocurrency by market capitalization behind Bitcoin (BTC), Ethereum (ETH), USDT, Binance Coin (BNB), XRP, and USDC – may be on its way to ahead of its closest competitor, XRP.
This potential change is largely due to the intensifying infrastructure race between the two projects, as market analyst Alex Karchidi of The Motley Fool highlighted in a report on Tuesday.
Race for tokenization capital
Although XRP has a larger market cap of around $87 billion compared to Solana’s $50 billion at the time of writing, both assets seek to tokenize real-world assets (RWAs), such as stocks and commodities, that have been converted for trading on the blockchain.
Karchidi notes Solana’s strengths lie in its speed and cost-effectiveness, making it particularly suitable for managing tokenized assets that require rapid movement at scale, such as stocks, bonds and commodity contracts.
The Solana platform currently has approximately $272 million in tokenized resources in circulation within its ecosystem, representing a 14% increase over the 30-day period ending March 5.
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Forecasts provide total market value tokenized shares could reach more than $38 billion by 2035, from about $1 billion today, indicating a significant growth area poised to compete.
The argument for Solana’s potential to move beyond XRP comes from the effort to centralize the trading of stocks, exchange-traded funds (ETFs) and overnight institutional funds – all with minimal costs.
Karchidi confirms that Solana does not necessarily need to capture 100% of the tokenized asset market to see a significant price increase.
its current market capitalization is already so close to XRP’s profit that even a small profit from XRP could tip the scales in Solana’s favor. Karchidi admits that Solana can actually bring XRP back. However, SOL’s way to transition from XRP is not without problems.
Edge XRP vs. Solana
At the moment, XRP Ledger (XRPL) has approximately $453 million in tokenized assets, not just for registration, but specifically for trading. The stablecoin base in XRPL is now around $432 million.
Most of XRP’s tokenized assets consist of US Treasury bills and government bonds, which are worth about $294 million. On the surface, this installation may not threaten Solana’s growth trajectory.
However, the analyst claims that XRP has its advantages. Known for its speed and low transaction costs, XRP also benefits from a robust compliance infrastructure integrated into its blockchain.
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This allows financial institutions to specify assets such as bonds, stocks or securities to avoid the time-consuming process of developing a compliance framework from scratch. As a result, XRP can attract more capital gains related to tokenization in the next few years.
Despite these challenges, the analyst believes that Solana will eventually outperform XRP in terms of valuation, possibly in 2030 and beyond, due to its plans for a larger ecosystem.
At the time of writing, Solana was trading around $88.48, up 2.7% in the previous 24 hours. On the other hand, XRP has surpassed SOL growth in the same period, with gains close to 5% and the token trading at $1.43.
Featured image from OpenArt, chart from TradingView.com
