Solana (SOL), currently the seventh-largest cryptocurrency by market cap—trailing behind Bitcoin (BTC), Ethereum (ETH), USDT, Binance Coin (BNB), XRP, and USDC—may be on the path of surpassing its closest competitor, XRP.
This potential shift is largely attributable to the intensifying infrastructure race between the two projects, as highlighted by market analyst Alex Carchidi from The Motley Fool in a Tuesday report.
The Race For Tokenization Capital
While XRP holds a larger market cap of approximately $87 billion compared to Solana’s $50 billion at the time of writing, both assets are vying to become the backbone for the tokenization of real-world assets (RWAs), such as stocks and commodities converted for trading on blockchains.
Carchidi notes that Solana’s strengths lie in its speed and cost-effectiveness, making it particularly suited for managing tokenized assets that require rapid movement at scale—like stocks, bonds, and commodity contracts.
The Solana platform currently has around $272 million in tokenized stocks circulating within its ecosystem, marking a 14% increase over the 30-day period that ended on March 5.
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Predictions suggest the total market value of tokenized stocks could climb to over $38 billion by 2035, up from about $1 billion today, indicating a substantial growth area ripe for competition.
The argument for Solana’s potential to overtake XRP hinges on its aspiration to become the central hub for trading equities, exchange-traded funds (ETFs), and institutional funds around the clock—all at minimal costs.
Carchidi asserts that Solana doesn’t necessarily need to capture 100% of the tokenized assets market to see significant price appreciation.
Its current market cap is already so close to that of XRP’s that even a modest gain at XRP’s expense could tip the scales in Solana’s favor. Carchidi acknowledges that Solana may indeed flip XRP. However, the path for SOL to surpass XRP is not without challenges.
XRP’s Edge Against Solana
At present, the XRP Ledger (XRPL) holds approximately $453 million in tokenized assets specifically available for trading, rather than just for record keeping. The stablecoin base on XRPL is currently around $432 million.
A substantial portion of XRP’s tradeable tokenized assets comprises US Treasury bills and government bonds valued at about $294 million. On the surface, this setup may not seem to threaten Solana’s growth trajectory.
Yet, the analyst contends that XRP has its own advantages. Known for its speed and low transaction costs, XRP also benefits from a robust compliance infrastructure that is integrated into its blockchain.
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This allows financial institutions looking to tokenize assets—such as bonds, stocks, or securities—to avoid the time-consuming process of developing a compliance framework from scratch. As a result, XRP may attract more capital inflows related to tokenization over the next few years.
Despite these challenges, the analyst believes that Solana would eventually outperform XRP in terms of valuation, possibly in 2030 and beyond, owing to its plans for a larger ecosystem.
At the time of writing, Solana was trading at roughly $88.48, up 2.7% in the previous 24 hours. XRP, on the other hand, has surpassed SOL’s growth over the same period, with gains approaching 5% and the token trading at $1.43.
Featured image from OpenArt, chart from TradingView.com