{"id":21525,"date":"2025-02-26T13:00:00","date_gmt":"2025-02-26T11:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/solana-at-520-how-realistic-is-that-forecast\/"},"modified":"2025-02-26T13:00:00","modified_gmt":"2025-02-26T11:00:00","slug":"solana-at-520-how-realistic-is-that-forecast","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/solana-at-520-how-realistic-is-that-forecast\/","title":{"rendered":"Solana at $520: how realistic is that forecast?"},"content":{"rendered":"

In 2024 Solana became the most popular blockchain network thanks to the frenzy around memecoins<\/a>\u2014the calling card of the current bull market. That has led some analysts to suggest that the native token, SOL, could overtake ETH by market capitalisation<\/a>.<\/p>\n

Oleg Cash Coin examines how well such forecasts stack up.<\/p>\n

SOL\u2019s performance<\/h2>\n

At one point Solana surged<\/a> to the top by trading volume on decentralised exchanges (DEXs), depriving Ethereum of its monopoly over DeFi and smart contracts.<\/p>\n

\"Solana
DEX trading volumes on Solana versus ETH. Data: The Block<\/a>.<\/figcaption><\/figure>\n

Most modern networks are both fast and cheap, making technological advantages marginal. What matters instead are network effects, ease of user experience and the depth of liquidity.<\/p>\n

The era of breakthrough blockchain mechanics likely ended in 2017\u20132020. Today most things are built atop ready-made solutions, dressed up in shifting narratives.<\/p>\n

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\u201cSome smart people tell me that Solana has a serious community of smart developers, and now that the awful money opportunists have been washed out, the chain has a bright future. It\u2019s hard for me to tell from the outside, but I hope the community gets its fair chance to thrive,\u201d \u2014 <\/em>wrote<\/em><\/a> on December 30, 2022, Ethereum\u2019s founder Vitalik Buterin.<\/em><\/p>\n<\/blockquote>\n

A few days earlier the first meme token on Solana\u2014Bonk\u2014had appeared. It became the starting point for a whole trend in the bear cycle that followed the collapse of FTX<\/a>. Notably, the failed exchange was among the largest investors in Solana tokens and held more than 58m SOL (~$8bn at today\u2019s price).<\/p>\n

Not everyone believes that the network\u2019s fundamental changes, Sam Bankman-Fried\u2019s interest and the token\u2019s rise from $8 to $250 were merely coincidental. Among the sceptics is Binance\u2019s founder, Changpeng Zhao (CZ).<\/p>\n

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\u201cMemecoins were incredibly popular during [2024]. Major exchanges did not benefit from this trend the same way blockchain platforms did, especially on Solana. There are suppositions about the reasons for what is happening, although I cannot confirm the details. Solana had close ties with FTX. After its collapse, many people who lost money received no support and turned to <\/em>Pump & Dump<\/em> schemes,\u201d \u2014 <\/em>said<\/em><\/a> CZ in an interview with Wu Blockchain.<\/em><\/p>\n<\/blockquote>\n

He also noted that Solana, like other blockchains, still suffers from congestion during traffic spikes. Even so, the exchange\u2019s founder acknowledged that Solana proved an ideal platform for memecoins, being in the right place at the right time.<\/p>\n

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\u201cIt is similar to how Binance benefited from the ICO boom in 2017,\u201d CZ concluded.<\/em><\/p>\n<\/blockquote>\n

Liquidity, unlocks, inflation<\/h2>\n

But the story may not be about memes at all. One of the largest asset managers, VanEck, forecasts<\/a> Solana at $520 by end-2025 solely on the basis that the US is expected to see an increase in the M2 money supply<\/span>.<\/p>\n

Analysts reckon this will channel liquidity into risk assets, including cryptocurrencies. In the same outlook, VanEck casts Solana as one of the leading smart-contract platforms. With one important caveat: circulating supply is modelled at 486m SOL, implying a market value of $252bn.<\/p>\n

Yet by late February 2025 the actual figure already exceeds 494m. By the end of March, unlocks of around 10m SOL are scheduled on the network, with a further 15m SOL before year-end.<\/p>\n

Although exact unlock amounts are not specified, monthly investor allocations will continue at least until 2028. One should also factor in SOL\u2019s sizeable programmed inflation of 4.7% a year.<\/p>\n

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15.725M of SOL ($3,066,430,575) will be unlocked over the next 3 months (Feb-Apr), much of that coming from the FTX estate holdings from transactions they did with the Solana foundation in 2020.<\/p>\n

FTX \/ Alameda and Solana Labs \/ Solana fdn entered into 5 transactions, in total the\u2026 pic.twitter.com\/BI19GtWitD<\/a><\/p>\n

\u2014 R? (@Ren_gmi) February 16, 2025<\/a><\/p><\/blockquote>\n