Solana Might Be A Good Investment For 2022 - 3 Reasons Why?

Solana Might Be A Good Investment For 2022 - 3 Reasons Why?

2021-12-18 | Daniel Smith

Solana Might Be A Good Investment For 2022 - 3 Reasons Why?

Solana (SOL) has emerged as a leading challenger in the smart contract market, with the network's total value locked (TVL) increasing by $660 million in the last year and extending over more than 40 decentralized apps to reach an all-time high of more than $11 billion. Despite this increase, investors have grounds to ask if the present market valuation of $56 billion is warranted, and how it relates to other networks such as Binance Smart Chain (BNB), Avalanche (AVAX), and Polygon (MATIC). When comparing Terra (LUNA), Solana, and Avalanche price performance over the last six months, there is a clear dissociation from other smart contract platform rivals. There is a lot of institutional interest in Solana's ecology. Solana's market capitalization is much more than twice that of Avalanche and Terra, both of which have a market capitalization of $26 billion. Studying Solana's latest headlines on several resources yields an unusual mix of institutional investments, ranging from Solana Labs' $314 million private token sales in June to Solana's DEX project Orca's $18 million funding in September. According to investor interest, there is significant proof of a rising ecosystem. Nevertheless, in order to determine how good Solana's scaling solution is, we must examine its utilization numbers. Uniswap has the most active addresses on Ethereum, at 188,200. Raydium's 97,600 weekly users are thus quite amazing, especially given that it was just created 10 months ago. However, Uniswap had approximately $4.3 billion TVL in February 2021. In the case of Solana's NFT marketplace Magic Eden, its 58,400 weekly active addresses represent even more than half of Ethereum's OpenSea, the sector's undisputed market leader in terms of volume and user activity. The Trader Joe decentralized financial app has a high concentration of Avalanche user activity, however, its $715 million monthly volume pales in compared to Uniswap's $22.1 billion or Raydium's $12.5 billion. Polygon, which has $2,442,027,958 in trading volume on its QuickSwap DEX, can also say the very same. SOL


Solana does have the third largest futures market in the country. Solana is currently the third-largest holder of futures open interest, the most crucial metric in derivatives contracts. This metric totals the number of contracts owned by market players independent of current trading activity. Notwithstanding the dramatic dip from the record of $1.9 billion on November 8, Solana remains the third-largest derivatives market by volume, with $860 million in futures open interest. Binance Coin (BNB) futures, for example, have $520 million, trailed by Terra (LUNA) with $430 million. Solana is the market leader in TVL, users, and derivatives. There is undeniably a lot of activity emanating from Solana's on-chain data and derivatives markets. The network's TVL has expanded by 15x in the last six months, and Solana's DApps users account for roughly half of the total number of customers on the Ethereum network. Solana appears to be narrowing the deficit in three key indicators: TVL, active users, and derivatives markets.

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