Introduction:

  • Solana experienced significant growth in 2021, but faced challenges in 2022 including a bear market, FTX issues, and network outages.

  • Despite doubts, Solana has shown resilience with outperforming prices, strengthened fundamentals, and growing developer momentum.

Key Takeaways:

  1. Fundamentals for Future Growth:

    • Network upgrades, innovations like SuperTokens, and developer momentum position Solana well.

  2. On-Chain Metrics:

    • Long-term holder accumulation and efficient liquidity use on Solana.

  3. Major Narratives for 2024:

    • LSD-Fi, real-world assets (RWAs), and decentralized physical infrastructure (DePIN).

  4. Risks:

    • Future FTX estate SOL unlocks and competition from Ethereum layer 2 solutions or new blockchains.

Five Fundamental Factors Propelling SOL:

  1. Nearly 100% Uptime:

    • Improved stability with only one outage in 2023 due to the 1.14 network upgrade.

  2. 1.16 Upgrade:

    • Dramatic reduction in RAM usage, introduction of confidential transfers, and enhanced support for zero-knowledge proofs.

  3. Firedancer:

    • A revolutionary Solana validator client improving efficiency and scalability, setting the stage for scalability improvements.

  4. SuperToken:

    • Major innovation offering novel capabilities, enhancing DeFi privacy, and enabling various use cases.

  5. VC Funding Driving Ecosystem Innovation:

    • Despite an 85% decrease in monthly VC funding, Solana’s hackathons and developer momentum demonstrate strength.

Three On-Chain Metrics Supporting Bull Case:

  1. Exchange Balances:

    • Recent uptick in exchange inflows, but long-term holders show accumulation.

  2. Solana Active Stake:

    • Despite short-term price surge, total staked SOL has modestly increased, indicating strong long-term holder commitment.

  3. Growing Trading Volume:

    • Solana’s trading revenue surpasses Ethereum, highlighting efficient liquidity use.

Three Exciting Narratives in 2024:

  1. LSD-Fi:

    • Liquid staking protocols driving TVL growth, with potential for LSD-Fi protocols to attract new liquidity.

  2. RWAs:

    • SuperToken’s launch enhancing real-world asset integration, fostering innovation in RWA protocols.

  3. DePIN:

    • Emergence of Decentralized Physical Infrastructure Networks (DePIN) on Solana, attracting new users and opportunities.

Potential Risks to Watch:

  1. FTX Estate Holdings:

    • Unlocks of FTX estate SOL holdings may introduce selling pressure.

  2. Increased Competition:

    • Possibility of other blockchains improving to outperform Solana, particularly monitoring Ethereum’s scaling advancements.

SOL Price Target 2025:

  • Based on historical ratios and Solana capturing 5% of Ethereum’s market value, a target of 0.05 ETH/SOL is reasonable.

  • Price projections range from $150 to $500 depending on Ethereum’s price.

Disclaimer: The information is not financial or investment advice, provided for entertainment purposes only, and individual responsibility is emphasized for capital-related decisions.