Hedera Hashgraph has gained attention from institutional players and serious investors as being one of the fastest and most efficient distributed ledgers in the market.
With its enterprise-driven governance model and low fees, Hedera is often mentioned as a competitor to Ethereum, XRP Ledger, and Stellar when it comes to institutional adoption.
Despite the good news, is Hedera prepared to become a possible top 5 network in the industry, and what will it take for HBAR to reach that level?
Hedera was designed from the beginning with institutional usage in mind. Its governing council, made up of corporations, universities, and organizations across various industries, provides HBAR both credibility and global reach.
This governance model positions Hedera as a trusted network for enterprises that may require regulatory compliance and stability before moving real-world assets on-chain or committing to business ventures on ledgers.
Compared to Ethereum, Hedera’s advantage is its consensus architecture. Hashgraph’s consensus is one of the most unique and robust in the industry, able to provide security, speed, and high throughput that other networks, like Ethereum, would struggle to do.
Against the XRP Ledger and Stellar, Hedera offers stronger programmability through the Hedera Token Service and Smart Contract Service, making it more adaptable for complex tokenization and DeFi protocols.
Despite this, the XRP Ledger is due for an overhaul, which will introduce zero-knowledge proofs, multi-purpose tokens, and native lending abilities.
For Stellar, the network has made new tokenization partnerships and stablecoin ventures with PayPal, making payments easier for MoneyGram and PayPal users worldwide.
The Hedera Council is led by the likes of Dell, Google, Arrow Electronics, and more, but some HBAR investors have expected more from the institutional node runners. Hashgraph’s new HEAT initiative aims to help Hedera Council members bring ideas to the table and turn them, quickly, into products.
Recent news, such as Hedera being utilized to tokenize MMFs with Lloyds Bank, Aberdeen Investments, and Archax, has also allowed HBAR a chance to showcase its capabilities.
The launch of initiatives like the Hedera Stablecoin Studio, wETH integration via Stargate Finance, and growing partnerships with DeFi infrastructure projects show Hedera is still on track.
Hedera’s predictable, low transaction costs and fairness in ordering make it particularly attractive for liquidity providers and firms seeking a network with low fees for building new projects on top of.
Another differentiator is Hedera’s carbon-negative status, which aligns with increasing institutional demand for sustainable finance solutions.
Ethereum remains the most dominant smart contract and DeFi network due to its large developer ecosystem and established infrastructures.
For Hedera to compete, it must expand its DeFi applications quickly and bring users and TVL from across the crypto industry to Hedera’s most widely used platforms, such as SacuerSwap.
Meanwhile, XRP and Stellar have carved out niches in cross-border payments and international use cases. Both networks have partnerships with banks, payment providers, and regulators.
Hedera’s council provides legitimacy, but it must still demonstrate long-term adoption and products that are using Hedera in real-time, beyond a proof of concept.
DOVU on Hedera is utilizing the network to tokenize carbon credits and stamp out fraud in the sustainability industry, a goal worth billions. Projects like DOVU are helping show the world what Hedera is capable of doing.
For Hedera to secure itself in the top-tier institutional and DeFi lists, various milestones may need be achieved, such as:
Hedera Hashgraph has the architecture, governance, and enterprise alignment to emerge as a leader in institutional DeFi.
Moving from speculative potential to dominance may require strong, real-world traction and a stronger ecosystem of developers and liquidity providers, which can take time to be fully realized. Although once done, the sky has no limits.
The post Is Hedera Ready to Compete as a Top DeFi and Institutional Network? first appeared on AllinCrypto.
Also read: Hedera Price Analysis: Can HBAR Break Above $0.26 or Slip Below $0.21?
