PayPal has made a significant move in the blockchain space by choosing Solana to launch its PYUSD stablecoin. It states that Ethereum does not provide the optimal solution for payment transactions.
José Fernández da Ponte, PayPal’s Vice President for Blockchain, Crypto, and Digital Currencies, confirmed this decision, emphasizing that Solana’s network outperforms Ethereum in key transaction speed and cost efficiency.
PayPal’s decision to use Solana over Ethereum
Fernández da Ponte highlighted the shortcomings of the Ethereum network, explaining that it lacks the scalability and speed required for effective payment processing. Solana, in contrast, can handle up to 1,000 transactions per second and boasts lower transaction costs, making it an ideal platform for PayPal’s payment services. The choice to use Solana for the launch of PYUSD demonstrates the payment giant’s focus on delivering fast and affordable services to its users.
PYUSD launch and hackathon announcement
On May 29, PayPal announced the launch of PYUSD on the Solana blockchain. The press release underscored Solana’s ability to process high volumes of transactions quickly and with low fees. This advantage over Ethereum was a key factor in PayPal’s decision. Additionally, in collaboration with Portal, PayPal initiated the Global PYUSD Portal Hackathon on June 30. The hackathon aims to distribute $40,000 in prizes to six winners, with the grand champion receiving $15,000 in PYUSD. The winners will be recognized at the Solana Hacker House event in Hong Kong, scheduled for October 24-26, 2024.
TrueX exchange chooses PYUSD over USDC
Adding to PYUSD’s growing adoption, the TrueX exchange, founded by former Coinbase employees Vishal Gupta and Patrick McCreary, announced it would use PYUSD instead of USDC. This decision further boosts Solana’s prominence in the blockchain ecosystem, particularly as Gupta was involved in developing USDC during his time at Coinbase. According to DeFiLlama data, PYUSD’s supply on Solana now surpasses its supply on Ethereum, with Solana holding 50.2% of the stablecoin’s total supply.
PYUSD’s market presence
PYUSD is a stablecoin backed by US dollar deposits, cash equivalents, and U.S. Treasury Bonds, ensuring a 1:1 peg with the US dollar. Staticcoin is available for transactions on both the PayPal and Venmo platforms. As of this writing, PYUSD ranks fifth in market capitalization among stablecoins, with a market cap of $732 million and a 24-hour trading volume of over $32 million, according to Coinmarketcap. This strategic shift by PayPal underscores the growing importance of scalability and low transaction costs in blockchain payment solutions, with Solana emerging as a preferred platform for companies aiming to meet these demands.