When the market value surpasses 100 billion USD, let's talk about Solana's momentum and constraints.

Original | Odaily Planet Daily (@OdailyChina)

Author | Wenser (@wenser 2010)

On November 10, Coinmarketcap data showed that SOL's market capitalization once surpassed $100 billion, briefly overtaking the traditional listed company Vanguard Group, ranking 192nd among 20,666 global assets; on the 11th, according to data from 8marketcap, SOL's market capitalization fell back to $97.78 billion, with a 7-day increase of 27.83%, ranking 199th among 20,666 global assets and 4th in cryptocurrency market capitalization. Meanwhile, professionals from various institutions such as Bitwise, Standard Chartered Bank, and Coinbase expressed high confidence in the future development of the Solana ecosystem.

Odaily Planet Daily will explore the secrets behind "Solana's market cap breaking $100 billion" together with readers in this article.

Market Outlook Overview: Solana is the Future

Since the FTX collapse in 2022, the popularity of the Solana ecosystem plummeted, with SOL's price dropping below $10 (on December 30, 2022). However, with continuous efforts from the official team and developers in the Solana ecosystem, it has ultimately experienced a revival through the development of multiple sectors such as RWA, DePIN, DeFi, and Meme coins.

In addition, considering Solana's previous financing stage's "capital lineage," countless investment institutions, traditional financial institutions, and even relevant departments in the U.S. political and economic sectors hold a positive attitude towards it. Many institutions and individuals have publicly voiced their support for the Solana ecosystem. Below are representative viewpoints:

When the market cap surpassed $100 billion, discussing Solana's momentum and constraints

The low point of SOL's price occurred two months after the FTX collapse.

The ETF Store President: Predicting several new spot cryptocurrency ETFs, including SOL, will be applied this week

Nate Geraci, President of The ETF Store, stated: "I predict that this week issuers will submit applications for several new spot cryptocurrency ETFs, including XRP, SOL, ADA, etc. Assuming multiple issuers are well-prepared for the election results, being a bit aggressive now is not a bad thing."

Arthur Hayes: During the U.S. election, Solana will be the "high beta Bitcoin"

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer of Maelstrom, previously expressed optimism about Solana before the U.S. elections in early November, referring to it as "high beta Bitcoin" on the Unchained podcast. He explained that Solana is a good choice due to its strong liquidity; if Bitcoin performs well, Solana is likely to rise.

Additionally, Hayes stated that in the long run, who wins the U.S. election is not important, as the primary impact on digital assets will be the Federal Reserve's decision on whether to cut interest rates on November 7.

Hayes also expressed a preference for SOL over ETH, believing that Ethereum is currently "too slow" and needs to change its narrative to alter perceptions of its poor performance in recent months. He pointed out that Solana currently occupies "mind share," acts quickly, and is likely to outperform Bitcoin when the market is booming, while the "beta value coefficient" of Ethereum and Bitcoin is the same, or even slightly lower.

Trump's election is favorable for Solana and Bitcoin

Previously, with Donald Trump's victory in the 2024 U.S. election, a surge of Trump-related tokens and prediction activities quickly emerged on the Solana (SOL) blockchain, highlighting the deep intertwining of blockchain and political events. Meanwhile, the decentralized prediction market Polymarket, which differs from traditional polls, successfully predicted Trump's victory by focusing on capital flows and changes in market sentiment, thus becoming an effective reference for analyzing political situations.

Moreover, some believe that Trump's successful election will lead to crypto-friendly policies, directly benefiting Solana and Bitcoin—Solana, as an important platform for U.S.-based DeFi and NFT projects, will attract more innovative projects and capital injection in a relaxed regulatory environment, potentially accelerating user growth and capital accumulation. Additionally, as a U.S.-based blockchain platform, Solana is expected to gain approval for SOL ETFs with Trump's election, further boosting its influence in the capital market.

Coinbase: The trading ecosystem on Solana is only second to stablecoins and L1 network fees in profitability

Coinbase analysts noted in a report that Meme tokens have been the core narrative of this bull market and are the best-performing cryptocurrency sector this year (measured by total market cap growth). Most Meme coin activities occur on Solana, primarily around the increasing popularity of pump.fun as the main Memecoin launch platform. To date, over 3 million tokens have been issued on pump.fun. The dominance of trading-related activities on Solana is reflected in its contribution to network transaction fees, accounting for over 82% of all non-voting fees paid on the network.

In addition to pure network fees, Solana's token issuance and trading processes also capture high value. If the trading ecosystem on Solana is viewed as an "independent financial category," it currently ranks third in profitability, only behind stablecoins and Layer 1 network fees. The report stated: "Trading-related activities on Solana typically account for 75%-90% of on-chain fees, far exceeding other networks like Ethereum, Base, and Arbitrum. While L2 solutions also show growth and innovation, they often face different scalability challenges and user fragmentation issues compared to Solana, whose fee dynamics and user activity patterns remain distinct."

Bitwise CEO: Solana's market cap is expected to exceed $100 billion

On November 10, Bitwise CEO Hunter Horsley stated that Solana's market cap is about to exceed $100 billion, with only three cryptocurrency assets reaching this level (note: excluding USDT). That day, SOL's market cap indeed broke the $100 billion mark, ranking as the 4th largest crypto asset.

Standard Chartered Bank Analyst: SOL reaching a new high by the end of the year seems "inevitable," with performance likely to exceed Bitcoin

Standard Chartered Bank analyst Geoff Kendrick predicted that Bitcoin will continue to rise until the end of the year, "easily reaching" $100,000 before the expiration of certain Bitcoin options on December 27. Notably, he previously successfully predicted that Bitcoin's price would reach $80,000 before the U.S. presidential election.

"I predict that Bitcoin's price will reach $125,000 by the end of the year, which is the next level, although I note that many Trump-related trades peaked around the inauguration on January 20 after the 2016 election… Therefore, if Bitcoin does not reach $125,000 by December 31, I believe it will reach that level by January 20," Kendrick, the bank's head of foreign exchange and digital asset research, stated in an email last Sunday.

Kendrick further predicted that given the recent gains of Ethereum and Solana, Bitcoin's price increase could "benefit all investors," with some tokens potentially outperforming Bitcoin. Kendrick wrote: "It seems inevitable that SOL will reach a new all-time high by the end of this year (the previous all-time high was $260 in November 2021). ETH reaching a new all-time high (the previous high was $4,866 in November 2021) may have to wait until around the inauguration, overall, we believe these assets will continue to rise, but SOL's performance may be the best."

SOL/ETH exchange rate recently hit a historical high

Previously, according to OKX market data, the SOL/ETH exchange rate reached 0.0724 on November 6, hitting a historical high.

In summary, based on the above viewpoints and data, Solana has a bright future, which naturally cannot be separated from its past performance and ecosystem efforts.

Solana's Past Performance: A Diverse "Meme Coin Paradise"

Specifically, the excellent performance of the Solana ecosystem in the past is mainly reflected in the following aspects:

Ecosystem Activity: Over 123 million monthly active addresses in October, a historical high

Data shows that the number of monthly active addresses on Solana reached a historical high of over 123 million in October. Compared to September, the number of unique addresses signing transactions on Solana increased by over 42%. In January of this year, the number of active addresses on the network was less than 12.7 million. Analysts stated that the recent surge in Solana's activity was driven by the Memecoin craze on the network, supported by platforms like Pump.fun and the decentralized exchange Raydium, both of which have experienced strong growth in recent months.

Additionally, the October report "State of Cryptocurrency" released by a16z indicated that Solana's monthly active addresses exceeded 100 million, while Ethereum and other EVM chains had only about 57 million, indicating higher user engagement on Solana.

Capital Influx: Over $600 million in tokens bridged to Solana in October, with over 90% from Ethereum

SolanaFloor previously disclosed data showing that over $600 million in tokens were bridged to Solana in October, with more than 90% coming from Ethereum.

Frequent Trading: Solana's on-chain DEX trading volume surpassed Ethereum in October

According to Defillama data, Solana's on-chain DEX trading volume reached $52.157 billion in October, surpassing Ethereum DEX's trading volume of $41.499 billion during the same period.

Financing Profile: Solana ecosystem DApps accumulated $173 million in financing in Q3

According to a Messari report, in the third quarter of 2024, institutional investment in Solana's native blockchain applications showed signs of recovery. A total of 29 decentralized applications (DApps) based on Solana raised $173 million, an increase of over 54% compared to the previous quarter. Although the number of funding rounds decreased by 37%, this funding represents the highest amount invested on the Solana chain since the second quarter of 2022. It is reported that asset management giant Franklin Templeton plans to launch a money market fund on Solana.

Offline Expansion: Solana Gift Cards Launched in Retail Stores Across Switzerland

According to previous disclosures from SolanaFloor, Solana gift cards have been launched in retail stores across Switzerland. After users purchase and activate them, the tokens will be stored offline in the Cryptonow wallet. This indicates that Solana is also making significant efforts in expanding into offline markets.

Liquidity Introduction: cbBTC Launched on Solana

Coinbase previously announced that its cbBTC has launched on Solana, marking the first token issued by Coinbase on Solana.

Meme Paradise: Total Market Cap of Meme Coins on Solana Exceeds $15 Billion, Setting a New Historical High

According to the latest data disclosed by Solana Floor, the total market cap of Meme coins on Solana has exceeded $15 billion, setting a new historical high.

Regarding the future development of the Solana ecosystem, its officials are confident, but it still faces significant challenges.

The Future and Concerns of Solana: Large-Scale Synchronous Composability vs. Centralization of Power

Regarding the future development direction of the Solana ecosystem, Solana co-founder Anatoly Yakovenko previously provided detailed explanations in an interview.

He mentioned Solana's unique position in the blockchain field and compared its deployment with L2 scaling solutions and other L1 blockchain systems.

Solana's Advantages and Challenges Coexist: The Path to Achieving Large-Scale Synchronous Composability

Previously, Anatoly Yakovenko posed the question: "What would the vitality of the Ethereum ecosystem look like without the contributions of L2 solution Base?"

This question arose while observing the growth metrics of Base, particularly in terms of user activity and transaction volume. He then elaborated: "In my view, scalability, infrastructure focus, and transaction efficiency are the three major advantages of Solana," while also recognizing the challenges Solana faces in the evolving blockchain technology landscape and further platform development.

Yakovenko emphasized Solana's unique architecture, with its development mission being to democratize access to transaction validation. Unlike traditional finance, Solana allows anyone to set up a validator and submit transactions directly, bypassing intermediaries. This level of decentralization is difficult to replicate in traditional finance. While this functionality exists, he also acknowledged that effectively scaling it remains a challenge.

Yakovenko compared Solana with Ethereum and various L2 solutions, highlighting the trade-offs between L1 and L2. L2 solutions typically use centralized orderers for low-latency transaction ordering. However, this can lead to congestion issues similar to those of L1 chains. While L2 is often seen as a short-term solution to congestion, it faces scalability bottlenecks when multiple applications or markets use them.

He emphasized that Solana's strategic focus is on building a robust L1 chain capable of supporting high throughput without the need for L2 solutions.

Another key factor is synchronous composability, meaning multiple applications can interact in real-time on a single chain. He believes this is crucial for DeFi, as single-chain or application-specific L2 solutions cannot support this level of composability, thus limiting scalability. Solana's final competitive advantage lies precisely in this: its complete commitment to large-scale synchronous composability, setting it apart from Ethereum and L2 chains.

Additionally, Solana's strength lies in its execution capability. While Ethereum is scaling through L2, Solana's development remains focused on perfecting its L1. He acknowledged that one day, blockchains will offer similar functionalities to Solana and provide faster iterations, but for now, Solana's pace of improvement keeps it far ahead of competitors. The core of Solana's potential lies in refining its infrastructure to support fairer and more open transaction processing, aiming for a truly decentralized future, which will position Solana as one of the leading blockchains in the coming years.

Of course, the issue of centralization of power remains one of the concerns of the external market regarding the Solana ecosystem. A recent representative viewpoint comes from Edward Snowden's remarks.

Snowden: Calls for Solana to Decentralize, Questions VC's Potential Impact on Solana

Edward Snowden, the whistleblower of the "Prism" scandal, discussed decentralization issues at the Near Redacted conference held in Bangkok, Thailand. When mentioning topics such as cryptocurrency, artificial intelligence, and blockchain technology, Snowden used Solana as an example to talk about the impact of VCs on blockchain projects—he described Solana as "born in prison" because it received substantial VC funding, which means that financial support may hinder its ability to operate independently as a blockchain network.

While he acknowledged Solana's rapid growth, he also expressed concern that too much ownership is being transferred to investors. However, he simultaneously pointed out that Solana may "achieve something" in the future.

Conclusion: The Endpoint of Solana's Ecosystem is Far from Over

As of the time of writing, Solana's price has returned to around $210, with its market cap again approaching $100 billion. Meanwhile, according to information from 8marketcap, Solana's market cap is currently about 6.18% of Bitcoin's; compared to Ethereum, Solana's market cap is about 26.17%.

As the potential of ETH, DeFi, and even more fields is explored, the Solana ecosystem may truly stand alongside Ethereum, becoming a genuine "Ethereum killer."