Traditional financial institution Franklin Templeton believes that Layer 1 blockchain Solana may continue to grow as the network is well prepared to capture the next wave of cryptocurrency adoption, solidifying its position as the third-largest crypto asset after Bitcoin (BTC) and Ethereum (ETH).
In its May report, Franklin Templeton stated that Solana has demonstrated its resilience after being severely impacted by the collapse of the FTX exchange at the end of 2022, and has taken a dominant position in this bull market. The company mentioned that major token airdrops, including Jito and Pyth, generated over $1 billion in wealth effects in the Solana ecosystem in the fourth quarter of 2023, driving the rise of SOL and other Solana ecosystem tokens, especially memecoins.
Franklin Templeton stated that there will be more anticipated airdrops in the Solana ecosystem in the coming months, which will continue to bring wealth effects to the ecosystem. Additionally, the total fees and decentralized exchange trading volume on the Solana network have significantly increased in the past year. The company expects this growth to continue as the Solana network effect strengthens and network performance improves. The report stated:
Franklin Templeton also believes that the next major breakthrough in the crypto space is likely to occur on Solana. The company mentioned four areas that could bring the next wave of adoption, including DePIN (decentralized physical infrastructure network), payments (especially micro-payments), compressed NFT/xNFTs, and Central Limit Order Book (CLOB)/Payment for Order Flow (PFOF). Solana’s technology gives it a unique advantage in these areas.
Addressing Solana network issues is an important catalyst
The report also mentioned that high activity has caused network congestion on Solana. The Solana developer community is continuously addressing these issues, improving the network, and building for future higher demand, with Firedancer being “an important catalyst to solve these network problems.”
Firedancer is a Solana validator client developed by Jump Crypto, aiming to optimize every component of the network. It is expected to go live later this year. Franklin Templeton wrote:
