Solana’s Rise: From Underdog to Blockchain Leader
Solana has outperformed all expectations following the FTX crash that plunged its token price. Now, with VanEck’s filing for a Solana ETF, it’s entering the big leagues.
Venture capital firms like Pantera Capital consider Solana the “macOS of blockchains” due to its user-friendliness. Solana abstracts its on-chain features, providing a seamless experience.
Solana’s Monolithic Blockchain Architecture
Unlike Ethereum and Cosmos, Solana’s network uses a monolithic design for vertical integration. This design optimizes components, enhancing user experience similar to Apple’s operations systems.
Solana’s architecture supports high throughput and low transaction fees, essential for decentralized finance applications. This attractiveness has led to increased retail activity and decentralized exchange volume, driving growth in active users and transactions.
Growing On-Chain Activity
Solana’s active addresses ballooned from 14,000 in October 2020 to nearly 1.34 million today. Priority fees surged from under $100,000 in mid-2023 to over $60 million by March 2024. DEX volume on Solana rose from 0% in early 2021 to over 24% by May 2024, with 85% of new tokens on DEXs based on Solana.
The ease of creating new tokens and meme coins has made Solana popular among casual traders. The rise of Telegram trading bots contributed to on-chain activity and the market cap of meme tokens like Dogwifhat (WIF).
Solana: The First Mainstream Blockchain
Beyond financial applications, Solana is versatile. MarginFi and Jupiter offer DeFi products accessible to users without deep pockets. Pantera Capital recently raised funds to buy $250 million worth of SOL tokens from the FTX bankruptcy estate.
Despite a 723% price rise over the past year, Solana offers venture capitalists tech and web3 opportunities beyond SOL speculation. It’s bridging blockchain-native products and mainstream consumer use.
Why Venture Capital is Bullish on Solana
Solana might mirror Apple in revolutionizing how we communicate, transact, and create via web3 applications. Projects like Privasea protect digital identities, while Grass controls data acquisition for AI, potentially disrupting the billion-dollar AI industry.
Grass, with over two million users, aims to fine-tune AI models and may soon handle enough data to train ChatGPT weekly. Critics note Solana’s network outages, but the upcoming Firedancer upgrade aims to boost resilience against congestion.
Overall, Solana’s potential to open new markets makes it a prime investment target for long-term venture capital.
Solana’s success post-FTX crash, combined with VanEck’s ETF filing, signals significant growth. High throughput and low fees enhance its appeal, driving retail activity and transaction volume.
