Why PayPal Chose Solana for PYUSD: Speed, Cost, and Scalability

Key Takeaways:

- PayPal selected Solana for deploying its PYUSD stablecoin due to its high efficiency and low transaction costs.
- Solana is emerging as a serious competitor to Ethereum in handling PYUSD transactions.
- The integration has accelerated PYUSD adoption, with growing usage across Solana-based decentralized exchanges.

Solana’s Technological Edge: Why It Stood Out

Solana's reputation for speed, scalability, and low transaction fees has made it a sought-after blockchain for many industries, including payments. Unlike Ethereum, which faces congestion issues and higher transaction fees, Solana can handle 1,000 transactions per second, a key factor in its selection for PayPal’s PYUSD deployment.

In fact, José Fernández, PayPal’s Head of CBDC, recently emphasized that Ethereum’s limitations make it less than ideal for payments, highlighting how Solana’s advanced features such as token extensions and efficient transaction handling, provide the right foundation for seamless digital transactions.

Expanding Blockchain Horizons: Solana’s Growing Role in Payments

PayPal deployed PYUSD on Solana to expand its offerings, giving users the ability to access the stablecoin across multiple blockchain networks. This strategy aimed to improve flexibility and efficiency, meeting the growing demand for faster, cost-effective digital payments. During Consensus 2024, PayPal revealed that the addition of Solana opened up new possibilities in the payment space, with Sheraz Shere, Solana’s GM of Payments, explaining that Solana's network was an ideal solution for PayPal’s growing suite of payment tools.

PYUSD’s Success on Solana: Growing Adoption and Usage

The launch of PYUSD on Solana has significantly boosted its adoption. Several decentralized exchanges (DEXes) like Jupiter and Orca have added PYUSD to their liquidity pools, enhancing its visibility and integration within the Solana ecosystem.

Since its launch on Solana, the circulating supply of PYUSD has rapidly increased. Data from DeFiLlama reported a 230% increase in Solana-based PYUSD’s supply within 30 days, with its total circulating supply reaching nearly $377 million, surpassing Ethereum’s PYUSD volume of $356 million by August.

Solana vs. Ethereum: Who Wins the Race for PYUSD?

As of mid-2024, Solana has overtaken Ethereum in PYUSD volume, and this trend may continue as more users migrate to platforms offering faster and cheaper transactions. However, it remains to be seen if PayPal will further expand PYUSD to other blockchains. The company’s focus on offering flexibility to users by integrating multiple blockchain protocols could enhance its dominance in the stablecoin space.

In the long run, this move could give users greater control over their transactions, with Solana solidifying its position as a leading blockchain for high-volume, low-cost digital payments.

Thank you for reading.