Solana is still striving to demonstrate substantial evidence that it can outperform Ethereum as the favored blockchain for institutions. According to Sygnum, a crypto bank group, Solana’s revenue heavily depends on memecoins, making it unstable. In a blog post on May 8, Sygnum mentioned that the sentiment around Ethereum remains negative, with the market shifting its focus to Solana’s transaction volumes and fee dominance. However, Sygnum stated that traditional financial institutions’ platform choices would primarily shape the medium-term outlook rather than sentiment. The company expressed doubts about Solana becoming the preferred choice due to Ethereum’s security, stability, and longevity being highly valued. Sygnum highlighted that institutions might opt for Ethereum over Solana because of the latter’s revenue generation being perceived as less stable, particularly concentrated in the memecoin sector. Another concern raised by Sygnum was Solana’s tokenomics, which it compared to the criticism Ethereum faced for stagnant transaction volumes on its mainnet. Even though Solana leads Ethereum in layer-1 fee generation, most fees go to validators and do not enhance the value of the Solana token. Ethereum still surpasses Solana in revenues by 2-2.5 times, according to Sygnum. The company suggested that Solana’s tokenomics are more flexible than Ethereum’s scaling strategy but noted that Solana seems unwilling to increase the token’s value, as evidenced by the rejection of a proposal to reduce SOL’s inflation rate in March. Sygnum believes that Solana could make gains on Ethereum by focusing on stable revenue sources. While Ethereum dominates in various use cases supported by governments, regulators, and traditional finance, such as tokenization and decentralized finance, Solana has shown progress in the value locked on its DeFi protocols. If Solana can enhance its revenue sources in areas like tokenization and stablecoins, it could close the gap with Ethereum. Despite Ethereum’s recent pivot in priorities, giving it a temporary sentiment boost, Solana still maintains strong support and potential for growth.