As an experienced crypto investor who’s been through the DeFi boom and bust cycles, I must say that the rising tide of Solana is nothing short of impressive. The report by Syncracy Capital has caught my attention, indicating that Solana is rapidly closing the gap with Ethereum in terms of market share revenue.
In simpler terms, it seems like the Solana network is catching up to Ethereum, based on signs that its market share revenue could increase significantly by the year 2024.
On November 12th, a positive analysis from investment firm Syncracy Capital was released, stating that the performance of Solana is almost on par with Ethereum across key economic indicators. This assessment highlights a steady increase in Solana’s growth during the recent period.
In October 2024, Solana’s actual economic worth, as depicted in a report, was 111% that of Ethereum’s in the same regard, marking a significant increase from the 1% it held during the same timeframe last year. This metric takes into account transaction fees and tips given to validators as MEV (Maximal Extractable Value), reflecting the network’s economic activity levels.
One method the hedge fund utilized to gauge Solana’s rising appeal was by examining its total application revenue, which is essentially the fees charged to protocols and apps constructed on a foundational blockchain like Solana or Ethereum. In October 2024, Solana’s TAR (Total Application Revenue) amounted to 109% of Ethereum’s, as compared to just 1% from the same period last year.
The significant increase in economic activity on Solana is largely fueled by the craze surrounding memecoins, as numerous new memecoins are gaining popularity within its ecosystem during October. Among the standout performers are Goatseus Maximus (GOAT), which soared to a market capitalization of $400 million in a single week, and SPX6900 (SPX), which rose by 379%. Additionally, Apu Apustaja (APU) saw a gain of 170%, while FWOG experienced a climb of 134% last month.
Memecoin speculation is a stress test
Although the use of memecoins on Solana has led to discussions about its lasting durability, Syncracy sees this speculative surge as a useful way to put the network’s dependability to the test.
“This phenomenon of onchain speculation is exactly what happened during the birth of DeFi on Ethereum in 2020 as well. In either case what’s important is that experiments are conducted and infrastructure gets tested.”
Since its launch in 2020, Solana has encountered numerous instances of downtime totaling several hours across various years. The latest instance of service disruption occurred in February 2024, where the network underwent a five-hour shutdown.
The network has also been attracting decentralized infrastructure (DePIN) protocols — blockchain-based networks that reward users for building and running real-world infrastructure.
The report highlights that four out of these unicorns – Helium, Render, IoNET, and Grass – are not financial applications but belong to the DePIN sector instead. Interestingly, Solana serves as the base layer for nine of these unicorns, while Ethereum supports 18.
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2024-11-12 23:39