Global payments giant Visa revealed its decision to include Solana in its stablecoin settlement pilot. Looking to leverage the capabilities of blockchain technology to streamline cross-border money transfers, Visa’s move towards Solana comes as part of its ongoing modernization efforts.

Impressive Transaction Throughput

Written by Mustafa Bedawala and Arjuna Wijeyekoon, Visa’s exploration highlights Solana’s remarkable transaction throughput. While the blockchain network hasn’t reached Visa’s awe-inspiring capacity of 65,000 transactions per second, it boasts an average of 400 user-generated transactions per second. During peak demand periods, this figure can surge to over 2,000. In comparison, leading blockchain network Ethereum manages an average of just 12 transactions per second.

Parallel Transaction Processing for Efficient Operations

A foundational aspect of Solana’s high transaction throughput lies in its ability to process transactions in parallel. This means that transactions impacting separate accounts can be executed simultaneously, making Solana well-equipped to support payment and settlement scenarios efficiently. Unlike other blockchains, such as Ethereum, which process transactions sequentially, Solana’s multi-threaded approach mitigates network congestion and ensures optimal throughput across the entire network.

Low and Predictable Transaction Costs

Another compelling feature of Solana is its low and predictable transaction costs. Typically, SOL’s transaction fees are less than $0.001, making it an attractive option for payment operations seeking efficiency and cost savings. This distinct characteristic sets Solana apart from Bitcoin and Ethereum, where transaction fees can fluctuate based on network demand. Solana’s localized fee market ensures that congestion in one account doesn’t impact others, allowing for smooth and consistent transaction processing.

Enhanced Transaction Finality and Network Availability

Solana’s network offers impressive transaction finality, measured by the speed at which actions are confirmed. With a slot time of 400 milliseconds, Solana surpasses many competitors in terms of transaction speed. Most applications on Solana adopt an “optimistic confirmation” mechanism, enabling quick transaction confirmations. Moreover, Solana boasts a robust network with 1,893 active validators and an additional 925 RPC nodes spread across 40 countries. This diverse validator ecosystem ensures network resilience and reliability, safeguarding against natural disasters or changes in access policies.

Stability and Resilience Through Multiple Validator Clients

The introduction of multiple validator clients, such as Jito-Solana and Firedancer, further solidifies Solana’s commitment to network stability. By diversifying validator clients, Solana minimizes the risk of a singular software flaw destabilizing the entire network. This approach enhances Solana’s overall resilience and strengthens its position as a reliable blockchain network.

Meeting Modern Corporate Treasury Demands

Visa’s decision to integrate Solana stems from the blockchain network’s unique technological advantages, including its high throughput, low costs, and extensive node presence. As Visa continues its stablecoin settlement pilot, it aims to determine if Solana can meet the demanding requirements of modern corporate treasury operations. With previous successful integration of the Ethereum blockchain for USDC transfers, Visa’s expansion to Solana reaffirms its commitment to staying at the forefront of blockchain-based payment solutions.

Looking Ahead

Visa’s integration of Solana is a decisive step towards harnessing the power of blockchain technology for streamlined cross-border settlements. By leveraging stablecoins like USDC and global blockchain networks, Visa aims to enhance the speed and efficiency of cross-border payments. As the value of Solana’s native cryptocurrency, SOL, stands strong, trading at $18.06, it becomes evident how this blockchain network is set to play a vital role in shaping the future of global financial transactions.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.