I'm using this market correction as a chance to double down on my research, and prepare my buy list for this dip.
Over the last few weeks I've been diving into Solana, and some of the statistics are very impressive.
🧵: Here's why I'm bullish on the future of $SOL. 👇
Over the last few weeks I've been diving into Solana, and some of the statistics are very impressive.
🧵: Here's why I'm bullish on the future of $SOL. 👇
2/ Firstly, let's discuss Solana's tech. $SOL uses a proof of stake consensus, utilising a proof of history mechanism to achieve scalability.
POH is unique as it allows individual nodes to validate transactions with small pieces of information. This increases $SOL's throughput.
POH is unique as it allows individual nodes to validate transactions with small pieces of information. This increases $SOL's throughput.
3/ A major benefit to this is that Solana can scale maintaining a "single global state." Meaning it doesn't rely on layer 2s to achieve scalability.
This is a major bonus, as liquidity and users aren't fragmented across multiple chains.
This is a major bonus, as liquidity and users aren't fragmented across multiple chains.
4/ The Solana network's major selling point is its low cost and fast speeds. It can achieve highs of 65,000 TPS, with a "theoretical limit" of 700,000 TPS.
nansen.ai
nansen.ai
5/ Interestingly, as Solana isn't EVM compatible (unlike $AVAX, $FTM etc.), its ecosystem has developed in its own right, attracting significant developer interest.
Pro: Increased developer/consumer loyalty.
Con: Harder to deploy new dAPPs.
Pro: Increased developer/consumer loyalty.
Con: Harder to deploy new dAPPs.
6/ So, the tech is undoubtably strong. But let's dive into the on chain metrics to further analyse the chain, and see what trends are unfolding. 👇
7/ $SOL has the most active addresses of any chain. Active addresses vs other chains (@nansen_ai):
$ETH: 2.15x
$MATIC: 4x
$AVAAX: 14.9x
$FTM: 26x
$ETH: 2.15x
$MATIC: 4x
$AVAAX: 14.9x
$FTM: 26x
8/ This is a pretty startling statistic. But things get even crazier when analysing the daily transactions.
In April, Solana has averaged 17m daily transactions. For comparison, $ETH does 1.1m per day. That's a 15.45x difference.
It's also a 20x from $AVAX (840k).
In April, Solana has averaged 17m daily transactions. For comparison, $ETH does 1.1m per day. That's a 15.45x difference.
It's also a 20x from $AVAX (840k).
9/ Where is all this transaction volume coming from?
Alongside its DeFi ecosystem, the obvious answer is NFTs.
Solana currently does $9.7m in daily NFT sales volume. This is by far the 2nd biggest NFT ecosystem after Ethereum.
Alongside its DeFi ecosystem, the obvious answer is NFTs.
Solana currently does $9.7m in daily NFT sales volume. This is by far the 2nd biggest NFT ecosystem after Ethereum.
10/ Aside from NFTs, gaming on Solana is one of its biggest future narratives. Big names include @TheMonkeyLeague, @staratlas and @CryowarDevs.
Right now there's not much to show in terms of active users, but development is taking place.
Right now there's not much to show in terms of active users, but development is taking place.
11/ Of course, we can't forget @Stepnofficial, which is also built on Solana. It's taken the world by storm with its move-to-earn game mechanics, earning viral success.
Its active users are now over 74,000 and is growing fast.
Its active users are now over 74,000 and is growing fast.
12/ But what about DeFi? Well, despite its dominance in the NFT space, Solana is lagging behind other chains (relative to its market cap).
However, 2 Solana DEXs have found their way into the top 11, with @orca_so and @JupiterExchange combining for $246m in daily transactions.
However, 2 Solana DEXs have found their way into the top 11, with @orca_so and @JupiterExchange combining for $246m in daily transactions.
13/ Interestingly, Solana's DEX volume has increased significantly over the last few weeks despite lagging in recent times.
Could this be signalling a shift in the narrative?
Could this be signalling a shift in the narrative?
14/ Let's be objective in our analysis. Here are the negatives:
Overall, Solana DeFi doesn't stack up to the likes of $AVAX, $LUNA or $FTM in my opinion. In terms of ease of use, fun, or TVL relative to $SOL's market cap.
Overall, Solana DeFi doesn't stack up to the likes of $AVAX, $LUNA or $FTM in my opinion. In terms of ease of use, fun, or TVL relative to $SOL's market cap.
15/ Other issues with Solana:
1. Failed transactions and errors (although this isn't surprising given the sheer transaction volume)
2. Constant downtime (six outages)
3. Centralisation (1k validators vs 300k on $ETH)
fortune.com
1. Failed transactions and errors (although this isn't surprising given the sheer transaction volume)
2. Constant downtime (six outages)
3. Centralisation (1k validators vs 300k on $ETH)
fortune.com
16/ But, we have to remember that this is new technology, and there are always going to be trade offs in the short term.
No chain has fully solved the blockchain trilemma (yet). But I have faith that these issues will be ironed out over time.
No chain has fully solved the blockchain trilemma (yet). But I have faith that these issues will be ironed out over time.
17/ It certainly has the developer power to do so.
Solana 5xd its total developers in 2021, to become the 3rd most developed on blockchain after $ETH, $DOT and $ATOM.
Remember the cycle starts with development: Developers -> Capital -> Users -> Transactions -> TVL -> Price.
Solana 5xd its total developers in 2021, to become the 3rd most developed on blockchain after $ETH, $DOT and $ATOM.
Remember the cycle starts with development: Developers -> Capital -> Users -> Transactions -> TVL -> Price.
18/ It also has some of the biggest financial backing in crypto.
Do you think FTX/Alameda Research will let $SOL fail? Safe to say I'm betting on @SBF_FTX.
Do you think FTX/Alameda Research will let $SOL fail? Safe to say I'm betting on @SBF_FTX.
19/ Yes, Solana has issues. But I think the combination of its backers, incredibly strong tech, and growing NFT/Gaming ecosystem hold it in good stead.
After all, it is down 61.5% from highs. If it were a perfect product, it would be well on its way to $1000 by now!
After all, it is down 61.5% from highs. If it were a perfect product, it would be well on its way to $1000 by now!
20/ This recent cool off in price makes $SOL a far more attractive investment than it was in November.
I believe its one of the better risk/reward propositions in the top 10. Over the long term, I'm looking to accumulate and farm $SOL.
I believe its one of the better risk/reward propositions in the top 10. Over the long term, I'm looking to accumulate and farm $SOL.
If you enjoyed this thread, please support by liking and retweeting the first tweet. 💙
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