As a seasoned crypto investor with a knack for recognizing potential in blockchain technology, I find PayPal’s decision to expand PYUSD onto Solana highly intriguing. Having witnessed the rise and fall of various cryptocurrencies over the years, I can confidently say that efficiency, scalability, and low costs are key factors driving mainstream adoption.
José Fernández, the head of CBDC at PayPal Holdings Inc (NASDAQ: PYPL), explained why PayPal launched its stablecoin, PYUSD, on Solana rather than Ethereum, despite already being on Ethereum. According to him, Ethereum is not the ideal choice for payment solutions. He emphasized that Solana boasts superior features such as token extensions and lower costs, making it a more suitable match for PayPal’s needs.
Choosing Solana in Addition to Ethereum
Solana boasts a processing speed of 1,000 transactions per second, making it an excellent choice for mainstream acceptance. Notably, the blockchain analytics platform Artemis has singled out Solana as the leading blockchain for handling tokenized transactions. Moreover, the Proof-of-Stake protocol is advantageous for PYUSD, especially as it becomes more popular in payment and settlement industries.
In many aspects, Solana stands out due to its ability to process transactions quicker and at a lower cost compared to Ethereum, despite both operating on the Proof-of-Stake consensus model. This efficiency is particularly attractive to users seeking swift transactions with reduced fees.
Jose Fernandez stated that by bringing PYUSD onto the Solana blockchain, we are moving closer to achieving our aim of creating a reliable digital currency suitable for transactions and commerce, which maintains a consistent value.
At Consensus 2024 in May, PayPal unveiled that PYUSD would be available on the Solana blockchain. The company viewed this as a promising route to give users various blockchain choices, enhancing their flexibility and control. This move was also aimed at broadening its business portfolio and solidifying its position within the crypto sector. Notably, Sheraz Shere, General Manager of payments at Solana, highlighted that the speed and scalability of the Solana network made it the perfect blockchain for innovative, affordable, and instant payment solutions.
Aftermath of PYUSD Integration on Solana
Following PYUSD’s launch on the Solana blockchain, the stablecoin has gained more massive adoption.
Numerous Decentralized Exchanges (DEXes) built on the Solana platform, such as Jupiter and Orca, have incorporated the stablecoin into their liquidity pools. Recently, the cryptocurrency exchange Bitget disclosed that it now supports PayPal’s PYUSD stablecoin on the Solana blockchain, making this digital asset more accessible to a wider array of users.
The amount of PYUSD tokens locked on Solana has been steadily growing at a fast pace. According to DefiLlama’s data, the total circulation of Solana-backed PYUSD stablecoins increased by approximately 230% within just 30 days in July. Since its launch on May 29, the token started with a nearly $252 million supply.
By August, Solana surpassed Ethereum in terms of daily trading volume for US Dollar-backed stablecoins (PYUSD). According to Dune Analytics, the volume of PYUSD on the Solana network was approximately 377 million, while on the Ethereum network it was 356 million. It’s also worth noting that the overall supply of PYUSD provided by PayPal has grown significantly over the past year.
There’s uncertainty about whether PYUSD will move to another blockchain soon, but integrations like these often provide users with the advantage of selecting various protocols. Over time, this empowers them to have greater control over their transactions and potentially strengthen PayPal’s efforts in establishing dominance within the stablecoin market.
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2024-09-20 15:24