Solana’s Potential Comeback: Analyzing Network Activity
Solana [SOL] has experienced significant challenges in the past, including frequent downtimes and the migration of prominent NFTs to other protocols. These obstacles posed a formidable challenge for the protocol.
Will Solana Make a Comeback?
Despite these setbacks, there has been a notable increase in activity on the Solana network. However, this surge in activity has not been sufficient to keep up with competitors such as Ethereum [ETH] and Arbitrum [ARB] on the network.
However, according to Messari’s data, there is hope for a turnaround.
Potential Impact of dApp Token Launches
Several popular dApps on the Solana network, including Magic Eden, Jupiter, and Wormhole, currently do not have native tokens. If these dApps were to launch their tokens in the future, it could drive a significant increase in activity on Solana, leading to higher fee revenue for the network.
Messari suggests that while these dApps have not explicitly announced plans to launch tokens, recent moves by competitors and the introduction of new rewards programs indicate that such launches are likely. This aligns with the common practice among successful app protocols.
By comparing benchmark valuation indicators, it is estimated that the potential market cap for crypto apps on Solana is high. Messari projects a growth of $1 billion to $2.5 billion for the top tokenless projects on Solana.
The launch of tokens will also impact Solana’s market cap. Research indicates that fee payers grow at twice the rate of market cap, which could result in an estimated 210K-290K new users following the launch of new projects.
However, at present, the earnings generated by the Solana network have experienced a decline. According to data from Token Terminal, Solana’s overall earnings decreased by 17.9% in the last 30 days.
Despite this decline in earnings, development activities on the Solana network have continued to rise. The number of code commits on GitHub has increased, indicating that new upgrades and updates are on the horizon for the Solana network.
These forthcoming updates have the potential to attract new users and generate more revenue, positioning Solana to compete with larger protocols in the cryptocurrency space.