In a deep dive into the Solana blockchain network, Visa today clarified its reasons for choosing Solana as part of its stablecoin settlement pilot. Visa announced last week that they were extending their stablecoin pilot to Solana, Bitcoinist reported. The global payments giant’s decision follows its ongoing efforts to modernize cross-border remittances using the power of blockchain technology.
Visa Why Choose Solana
Visa’s exploration, written by Mustafa Bedawala and Arjuna Wijeyekoon, highlights Solana’s impressive transaction throughput. While the blockchain has yet to match Visa’s impressive capacity of 65,000 transactions per second, it has an average of 400 user-generated transactions per second. During periods of high demand, that number can even surge to more than 2,000. For context, Ethereum is one of the leading blockchain networks, managing only 12 transactions per second on average.
An essential element of Solana’s high transaction throughput is its ability to process transactions in parallel. This parallel transaction processing ensures that transactions affecting different accounts can be executed simultaneously. This is in contrast to other blockchains such as Ethereum, which process transactions sequentially.
“Transactions affecting separate accounts can be executed simultaneously, allowing Solana to effectively support payment and settlement scenarios,” the authors explain. This multi-threaded approach helps alleviate network congestion and ensures that bottlenecks in one segment do not affect the entire network. throughput.
Another compelling feature of Solana is that transaction costs are low and predictable. Typically, SOL’s transaction fees are less than $0.001, making it an attractive option for payments businesses looking for efficiency and cost savings. This is in contrast to Bitcoin and Ethereum’s volatile fees, which change based on network demand.
Blockchain’s unique charging method ensures that congestion on one account does not affect other accounts. For example, if demand for a specific asset (such as an NFT) surges, only that specific account’s fees will increase. This localized fee market is closely related to the parallel processing capabilities of blockchain.
Visa also emphasized the importance of transaction finality, which measures the speed of confirmation operations on a blockchain network. SOL’s target slot time is 400 milliseconds, making it much faster than many competitors. Most applications on Solana use “optimistic confirmations” to determine their finality, a mechanism that confirms transactions faster.
In terms of network availability, Solana has an impressive 1,893 active validators and an additional 925 RPC nodes as of July 2023. A large number of nodes located in more than 40 countries ensures the network’s resiliency and reliability. The authors emphasize the importance of this diversity, noting that it makes the network “more robust against events such as natural disasters or changes in provider access policies.”
Additionally, the diversity of validator clients on Solana increases its resiliency. While a vulnerability may plague one client, other clients are not affected, reducing the risk of a single software flaw destabilizing the network. The introduction of multiple validator clients such as Jito-Solana and Firedancer underscores the project’s commitment to network stability.
Meet modern needs
Therefore, Visa’s decision to integrate Solana is rooted in the unique technical advantages of blockchain, including high throughput, low cost and significant node presence. As Visa continues its stablecoin settlement pilot, the company aims to determine whether SOL can meet the stringent requirements of modern corporate financial operations.
Visa’s move follows the integration of the Ethereum blockchain for USDC transfers in an Australian pilot project in 2021. Visa continues to position itself at the forefront of blockchain-based payment solutions with the recent expansion of payment capabilities for its stablecoin USDC into Solana. Speaking about the integration, Cuy Sheffield, Visa’s head of cryptocurrency business, said that Visa aims to increase the speed of cross-border settlements by leveraging stablecoins such as USDC and global blockchain networks.
At press time, SOL was trading at $18.06 after bouncing off the 61.8% Fibonacci retracement level.
Featured images from Medium, charts from TradingView.com
