Solana Faces Competition From Sui, Ton, Base Blockchains: Report

Solana's (CRYPTO: SOL) rapid rise as a high-performance blockchain is tempered by growing competition and network vulnerabilities, according to a new 21Shares report.

What Happened: The analysis highlights challenges like rival Layer 1 and Layer 2 networks, limited decentralization and reliance on speculative trading as key risks to Solana's dominance.

Despite its $80% surge in 2024 and $364 billion in transaction volume in early 2025, these hurdles could slow its trajectory.

"Layer 2 solutions like Base and newer Layer 1 networks such as Sui (CRYPTO: SUI), TON (CRYPTO: TON) and Monad present growing competition due to their strong technical performance and growing adoption," the report states, underscoring the competitive threat.

Solana's 1,314 validators pale compared to Ethereum's 1,064,480, raising concerns about decentralization.

"To improve decentralization, Solana may reduce the cost of onboarding validators, potentially through foundation subsidies," the report suggests as a mitigation strategy.

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Why It Matters: The network's heavy reliance on meme coins, which drove $30 billion in DEX volume during a 48-hour frenzy led by President Donald Trump's Official Trump (CRYPTO: TRUMP) token, exposes it to volatility.

"To diversify network usage and reduce reliance on speculative trading, the foundation and related venture capital firms are investing in more fundamentally sound sectors, such as DePIN and AI," the report notes.

Past network outages, though reduced, remain a concern, with the report proposing that "further resilience can be achieved by accelerating the development and adoption of alternative validator clients, such as FireDancer."

Solana's ecosystem, bolstered by partnerships with Visa, PayPal and Shopify, supports 3,000 transactions per second and $12 billion in stablecoin supply.

However, competition from Sui's $0.006 fees and TON's Telegram integration challenges its edge.

The report projects a potential $1080% upside for SOL's price at a lower discount rate, but risks like inflation and outages could undermine this optimism.

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