To buy or not to buy? Analyst speaks on Solana investment

  • Popular crypto analyst Lark Davis has covered whether it is worth buying into Solana in 2022.
  • Events include institutional interest, blockchain statistics, and network developments.

Would a Solana investment pay off this year? According to crypto analyst Lark Davis, the network’s transaction speed (over 50,000 TPS) makes it a “top tier” blockchain. Rivals Ethereum and Bitcoin only have speeds of 15TPS and 7TPS, respectively. SOL also boasts of “dirt cheap” network fees, an attractive feature for any blockchain user.

Importantly, Davis points out the growing relationship between the smart contract platform and big money funds. In May 2021, five new funds injected $100M to boost the network’s growth in China. In December of the same year, Sol announced a $150M blockchain gaming fund for platforms that utilize its technology. More recently, lending firm Maple Finance channeled $45M to Sol, also for expanding ecosystem growth.

Developments in Solana

SOL has also attracted the support of Sam Bankman-Fried, the founder and CEO of FTX crypto exchange. The young billionaire has called the blockchain a favorite of his, saying that despite multiple downtimes, the network still has great potential.

Aside from that, Solana currently has a staggering $6.5 billion in total value locked (TVL), according to DeFi Llama. Even though this amount has massively dropped from the high days when it was $15 billion, Davis says whatever has remained is still quite considerable. Moreover, the blockchain stands as the fifth largest in terms of TVL, ranking just after Avalanche, BSC, Terra, and Ethereum. SOL itself has been among the top 10 cryptocurrencies by market cap, a slight drop from the top 5 groups.

Even more, Sol had 3.72 million 7-day active addresses in the past week, according to blockchain analytics platform Nansen. At this figure, the network was above the likes of BSC, Ethereum, and Polygon.

Is SOL investment worth it?

Non-fungible tokens (NFTs) on Solana have attracted over $23 million in the past 24h, Davis notes. At this point, the network is only surpassed by Ethereum. Moreover, Solana’s NFTs are now available on OpenSea, a move likely to draw more users to Solana.

Even more, Solana is seeing an ever-increasing number of applications building atop it. One of the latest is Step’n, a web3 lifestyle app that has seen gains of about 35,000X since its token sale.

Other notable developments include the Solana ETP jointly launched by CoinShares and FTX, Grayscale’s Solana Trust fund, and CME Group’s consideration of Solana futures.

On the grim side, the network suffered a whopping $320M hack, in addition to six outages in the past year.

But even then, Solana still thrives. Coinbase recently confirmed the listing of the Solana-based project tokens ORCA and FIDA. Solana is also working on a native payments tool dubbed Solana Pay. Bank of America has itself noted that Solana could become the “visa of the digital-asset world.” 

Davis concludes that the network, despite its challenges, has great potential and would be a worthwhile investment.

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