The Solana chain has gone through a roller coaster ride. It has been one of the main stars of the bull run from 2021, reaching the top 5 in token valuation and close to 100 billons market cap. Then it went through a massive depression phase with the price going down more than 95%, and in the last year it has emerged strong again. The market cap and the price of the token have increased as well.
Let’s see how the network activities are doing under the current market conditions.
Solana has some unique tech. It is a sort of hybrid between Proof of Stake (PoS) and a novel concept that they call Proof of History. There is a lot to say about the proof of history concept, but in short here we will just mention that it is a concept that checks all the transactions in the right order/sequence. The Solana blockchain works with slots for periods of time, in which the chosen validators confirm the transactions.
Solana has a reputation for being one of the fastest blockchains, with a theoretical possible 65k transactions per second. Solana also has a controversial reputation over its decentralization since it has been put under maintenance and stopped operating a few times in the past.
We will be looking at:
- Total Value Locked TVL
- Active addresses
- Daily transactions
- Fees
- Staking and voting Rewards
- Inflation and supply
- Market cap
The period that we are looking into is 2021 to 2024.
The data for the analysis are taken from Defi Lama and Dune Analytics.
Total Value Locked
This is one of the most used metric for chains and apps representing the mount of value that is stored and handled by the chain. At the moment the chart for Solana looks like this.
Quite the ride.
Going from zero to 10B in the previous bull run, a drop to 300M in 2023. A growth again starting from the end of 2023, and we are now at 6B in TVL on Solana. Still lower then the previous heights.
Active Addresses
One of the key metrics for a blockchain is the number of active wallets. Here is the chart.
A massive spike at the end of this chart with a new ATH for the number of daily active wallets. Close to 5M DAUs on the Solana chain now far outpacing the previous numbers in 2021 when there was around 500k DAUs at the top.
For comparison the number of active wallets on ETH is somewhere around 500k, so the 5M on Solana are quite a lot. Still not sure how many of these are unique users and how many bots, my guess is that there is a lot of bots, but still the activity is high.
On a monthly basis the chart for active wallets looks like this:
Here again we can notice the spike in the last month with an amazing 80M MAUs in September 2024! Again not sure how many of these are bots.
Daily Transactions
The activity on the networks is mostly represented by the number of daily transactions. Here is the chart.
The number of transactions is where Solana shines. It probably holds the record for a number of daily active transactions.
At the peak there were more than 60M transactions per day. In the last period there are 40M transactions per day and have increased from around 20M.
Compared to ETH where there is just above 1M, or even Polygon where there is 5M to 10M transactions per day, Solana is leading by a lot.
Fees
Fees are quite the unpopular topic and one of the main reasons for the new EVM chains, as users are trying to find a way to escape ETH high fees.
Cumulative fees per day in USD.
A massive spike in the beginning of 2024 with daily cumulative fees reaching 5M at one point. A drop since then and we are now around 2M USD in fees daily on Solana.
On average per transaction in the past the fees are under one cent, occasionally reaching a cent.
Solana is one of the cheapest blockchain to transact on. Because of the very cheap fees we have seen a lot of botting on the chain, but it still manages the traffic. The thing is the validators need a lot of resources to maintain the speed and the numbers of transactions. Half of the fees are burned and half goes to validators.
Staking and Voting Rewards
Fees are just one aspect that the Solana validator receives as rewards. There are also staking rewards and voting rewards.
Here are the charts.
The staking rewards are at the bottom of the chart, while the voting on the top. Cumulative these two types of rewards account for around 60k SOL daily.
The staking and voting rewards have been quite constant in the period, with a slow downtrend.
The daily SOL for staking rewards is around 40k, while the voting rewards are at 20k.
Inflation and Supply
Inflation and supply are on of the most important metrics for a blockchain. Here are the charts from the official Solana docs.
The inflation rate for Solana starts at 8% per year and drops each year, reaching 1.5% after 10 years and stays at that level for the future years.
The supply looks like this.
The current supply of Solana is close to 470M. From the inflation schedule it is projected to reach more than 700M in 10 years’ time. After that the inflation should slow down to 1.5% per year, and the supply should increase more slowly.
Market Cap
At the end the chart for the market cap.
Solana has reached a new ATH in terms of market cap. While in terms of price it is still bellow prior to its past ATH. This is because there were new tokens added in the last years since 2021, more than 150M and this has pushed the market cap.
At the peak Solana reached an amazing 90B market cap, higher than the 2021 levels of 80B. At the moment the Solana market cap is around 70B. In terms of price it is now higher than 150 USD per token.
All the best
@dalz
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What I never understood about blockchains is why the inflation is so high at the start. To me it should be medium then over the first few years slowly rise and then start to slowly fall again after that. That's mainly because that's the trend of how most blockchains get their popularity over time and not at the start where it consolidates it to just a few starter accounts.
In any case I think SOL has performed rather well and has done well for itself. But it seems to be stuck in this sub $200 per token level. Still crazy high inflation at the moment though and that might be part of the price issues.
Spot on!
Inflation on SOL has been high in 2024!
Whats interesting the amount of tokens of SOL and HIVE are similar, so it was easier for me to draw conclusions. SOL started the year with around 420M and now it is at 470M and above. Its more than 10% in a year ... I'm gessing there were some tokens unlocks from presale or something ...
I agree, zing is not looking to decrease inflation in the near future!
Your TA is really illuminating and insightful. But just turning to Bitcoin for a moment, despite the rally then pull back trend we are witnessing BTC seems to be locking in gains and looking at the monthly trading chart BTC is moving consistently in a vertical direction, which is encouraging. But can I ask what do you make of Bitcoin's price patterns at the moment?
This is one of the chains that I like the most and the one that I see the most future in. That's why I'm investing in that ecosystem.
Daily active account increase means investors are active. Rewards are reduced. Nice informative post
I think some otger coins have the same market cap history from 2021 up today.
Hmm does Solana have an active social network...
did you mean their decentralized social Network?
Try DSCVR (although it's not originally from Solana, but ICP)
Is it as good as hive?
In my opinion, DSCVR is more like Facebook, while HIVE (PeakD, Ecency, Leo, etc.) is more like a blog.
The performance in loading the page still feels heavy. different from when opening a page on PeakD, Ecency, and the like.
Upvote or like on DSCVR can't earn anything yet. Only tips can make you earn there.
But there, you can get points (which can be obtained through daily login). The points are useful for future Airdrops (I'm not sure exactly when) and have other uses (I haven't fully explored).
I was introduced to DSCVR when some accounts on X talked about the free SOL that can be obtained there. But when I registered, there was no free SOL. Most likely the POINT I mentioned earlier affects whether or not we can get free SOL (For now, there is no free SOL)
Last September, DSCVR gave BONK (one of the Memecoins in SOLANA) for free by just interacting briefly with one of the apps there. It works like a crypto faucet that can be played every few hours.
To the....sun.
!PIZZA
Solana will be a good investment even in his bull run, hopefully people have accumulated enough, thanks for the insight.
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