Solana (SOL), currently the seventh-largest cryptocurrency by market capitalization – trailing Bitcoin (BTC), Ethereum (ETH), USDT, Binance Coin (BNB), XRP, and USDC – may be on a path to overtake its closest competitor, XRP.

This potential shift can largely be attributed to the intensifying infrastructure race between the two projects, as market analyst Alex Cararchidi of The Motley Fool highlighted in a Tuesday report.

The race for tokenization capital

While XRP has a larger market capitalization of around $87 billion compared to Solana’s $50 billion at the time of writing, both assets are competing to become the basis for the tokenization of real-world assets (RWAs) such as stocks and commodities converted for trading on blockchains.

Karchidis notes that Solana’s strengths lie in its speed and cost-effectiveness, making it particularly suitable for managing tokenized assets that require rapid movement at scale – such as stocks, bonds and commodity contracts.

The Solana platform currently has approximately $272 million worth of tokenized shares in its ecosystem, up 14% in the 30 days ending March 5.

Projections suggest total market value tokenized shares could grow to more than $38 billion by 2035, up from about $1 billion today, indicating a significant growth area ripe for competition.

The argument for Solana’s potential to overtake XRP rests on its aspirations to become a central hub for trading stocks, ETFs, and institutional funds around the clock – all at minimal cost.

Carchidi says Solana doesn’t necessarily need to capture 100% of the tokenized asset market to see significant price growth.

Its current market capitalization is already so close to XRP’s gain that even a modest gain at the expense of XRP could tip the scales in Solana’s favor. Carchidi admits that Solana can indeed reverse XRP. However, SOL’s path to overtaking XRP is not without its challenges.

Advantage of XRP over Solana

Currently, XRP Ledger (XRPL) has approximately $453 million in tokenized assets available specifically for trading, and not just for recordkeeping purposes. The stablecoin base on XRPL is currently around $432 million.

A significant portion of XRP’s tradable tokenized assets include U.S. Treasury bills and government bonds worth approximately $294 million. At first glance, it may seem that this configuration does not threaten Solana’s growth trajectory.

However, the analyst says that XRP has its advantages. Known for its speed and low transaction costs, XRP also benefits from a strong compliance infrastructure that is integrated with the blockchain.

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 inflow related to tokenization over the next few years.

Despite these challenges, the analyst believes that Solana will ultimately outperform XRP in terms of valuation, likely in 2030 and beyond, thanks to plans for a larger ecosystem.

At the time of writing, Solana was trading around $88.48, up 2.7% over the previous 24 hours. On the other hand, XRP outperformed SOL’s growth over the same period with gains close to 5% and the token traded at $1.43.

Featured image from OpenArt, chart from TradingView.com