Solana primed for a 20x?
Disclaimer: This information presented in this article is not financial advice. What you choose to do with the information is solely your responsibility. Cryptocurrencies are unregulated and highly volatile assets, and a greater-than 100% capital loss is very probable.
- Bitcoin made new lows compared to that made in the 2021 summer, going as low as $26,500 in May 2022.
- This price action signals the start of a new bear market.
- The collapse of the UST stablecoin and the Terra layer-1 (L1) blockchain were compounding catalysts.
- Market commentators call for a $20,000 Bitcoin, with some going as low as $10,000 and $7,500. All these scenarios are probable.
- Given the bearish market conditions, Solana has dropped from its all-time high (ATH) of $259 to a 52-week low of about $37, and it could go lower as the bearish trend continues to play out.
- The market conditions present an opportunity for staggered Solana entries. But take care to not catch falling knives as Bitcoin dominance increases, draining the life from altcoins.
- Notwithstanding, Solana has shown immense growth potential.
What is Solana?
- Solana is an L1 blockchain built for scalability, user-friendliness and cost-friendliness.
- Market commentators consider Solona highly centralised, though the ecosystem developers refute this claim.
- The L1 blockchain is fast, cheap to use, and piqued to be the home of NFTs, trading tools and blockchain gaming applications because of these advantages.
- Solana is a very popular L1 blockchain and does not require a deep dive. To learn more about Solana, please refer to the Solana Documentation.
Where is the market opportunity?
- The Solana ecosystem had over $12 billion of total value locked (TVL) at the peak of the market cycle in November 2021.
- At the time of writing, with BTC dropping more than 50%, the ecosystem still has over $3 billion TVL.
- Serum, the central order book system underpinning DeFi on Solana, announced a $100 million fundraise in January 2022 to expand operations.
- Github activity continues growing by as much as 34.2% quarter-over-quarter, according to Messari research.
- Though TVL and DeFi activities are in decline, network activities, including user growth, continue to grow.
- Solana Pay launches, enabling merchants to accept payments in USDC.
- Over 1,100 developers registered for the Solana Riptide hackathon.
Catalysts for further growth
Phantom wallet mobile app
- Phantom wallet app launched on iOS and Android.
- Excellent user experience and ease of use will draw the attention of many more retail users.
- Network usage has grown logarithmically, with a 4,400% user increase from 40,000 in July 2021 to 1.8 million in December 2021.
- CEO & Co-Founder of Phantom wallet, Brandon Millman, aim for 10 to 50 million users.
Magic Eden, OpenSea, Instagram & NFT growth
- Eth still dominates NFT sales, but Solana takes the second position by sales volume — an impressive feat for a relatively new L1 chain.
- Popular eSports platform, G2 Esport, announced a collaboration with Metaplex to offer Solana NFTs.
- Magic Eden — Solana NFT marketplace — raised $27 million in March 2022 from Sequoia, Paradigm, Solana Ventures, etc.
- OpenSea NFT marketplace now supports Solana NFTs and Phantom wallet.
- Instagram integration for Solana NFTs is currently underway.
EVM compatibility via Neon
- Most L1 projects implement Ethereum Virtual Machine (EVM) compatibility to draw value from the existing Eth ecosystem but with much lower gas fees.
- Solana is getting EVM compatibility via NEON.
- Neon will offer cheap gas for Ethereum applications on the Solana blockchain.
- Neon transaction speed is about 4,500 tps, and transaction fees are about 0.000015 SOL/tx.
- Will draw hundreds, if not thousands, of Ethereum (Solidity) developers to the Solana ecosystem.
GameFi and Move-to-earn (M2E)
- Solana ventures announced a $150 million fund to boost GameFi in 2022.
- Krafton, developers of PUBG announced they would develop games for the Solana blockchain.
- Move-to-earn mobile game, STEPN, exploded onto the scene, drawing the attention of non-blockchain users.
- STEPN has scaled its daily active users to over 74,000 since launching its public beta in December 2021.
- More retail-drawing and easy-to-use blockchain apps will increase capital flow into the ecosystem.
- Though Solana has done 100x from $0.5 to its current price of around $54, the potential to surpass its previous ATH is present.
- My price prediction is between $500 to $1,200, but I could be wrong, and it goes to zero like Luna if a black swan event occurs.