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Visa highly praises Solana: low cost, scalable, will be included in stablecoin settlement pilot

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Visa highly praises Solana: low cost, scalable, will be included in stablecoin settlement pilot

While Solana has been the subject of occasional outages and ridicule within the community, its underlying technology has caught the attention of Visa.

Visa Original Link

Why is Solana Poised to Become a Mainstream Payment Network?

Visa has emphasized that they have been closely monitoring innovative technologies related to blockchain scalability and are excited about Ethereum's progress in layer 2 scaling solutions.

While Visa believes that the payment ecosystem may adopt multiple blockchain networks, they see Solana as one of the networks with the potential to drive blockchain into a mainstream payment mechanism, including aspects such as transaction speed, cost, and scalability.

Additionally, Solana possesses many key features that could help it become a mainstream settlement network for stablecoins like USDC, as highlighted by Visa.

Visa Scale Transaction Throughput

Transactions Per Second (TPS) for various networks are as follows:

  • Visa: 65,000 TPS

  • Ethereum: 12 TPS

  • Bitcoin: 7 TPS

While Solana's 400 TPS is far from Visa's level, it can reach over 2,000 TPS during peak periods, which is sufficient for applications such as payment testing and pilot projects.

Solana is designed with high transaction throughput as its foundation, allowing for parallel transaction processing to significantly improve network efficiency. Unlike blockchains such as Bitcoin and Ethereum that process transactions sequentially, Solana's architecture enables simultaneous processing of multiple transactions, helping to prevent network congestion and impact overall performance.

Predictable and Cost-Effective Transaction Costs

Solana's transaction fees are typically below $0.001 and are predictable.

This helps Solana become an attractive payment network that can explore existing payment businesses and further reduce costs. Visa points out:

Compared to Bitcoin and Ethereum, Solana stands out in transaction costs. The latter two may experience unpredictable fluctuations due to surges in transaction demand, which can be challenging for payment companies to manage products and may lead to confusing consumer experiences.

Solana handles network congestion differently, with a localized market for transaction fees. If demand surges for specific asset categories like NFTs, the transaction costs for NFTs may temporarily rise, while transaction costs for other asset categories on the chain remain unchanged.

This makes Solana's cost market significantly different from the globally unified cost market of other public chains.

Average transaction fees in USD. For more information, see image description.
USD Average Transaction Fees for Various Chains

Transaction Finality Expected by Consumers

Transaction finality on the blockchain refers to transaction data being written into a block, reaching an irreversible state.

Visa considers transaction finality as important as TPS, and Solana excels in this aspect as well.

High Availability: Large Number of Nodes and Multiple Validator Clients

As of July 2023, Solana has 1,893 active validators and 925 RPC nodes.

Visa believes that a blockchain's availability can be measured through the number of validators and nodes, where a large number of nodes can provide the network with greater fault tolerance, especially when some nodes encounter issues or go offline. As long as a sufficient number of nodes are online, the network can continue to operate without data loss.

Visa concludes at the end of the article:

Solana's unique technical advantages, including high throughput through parallel processing, low transaction costs in a localized fee market, and flexibility brought by a large number of nodes, constitute a scalable platform with compelling value propositions in payment applications.

Visa emphasizes that these are the reasons why they decided to include Solana in their expanding stablecoin pilot program. In the future, as they conduct tests, they will focus on whether Solana can meet enterprise financial operational needs.