Solana Deep Dive: Reframing The Narrative

Key Insights

• Solana’s monolithic (read: integrated) design offers Web2-viable unit costs (via compression) and Web2-level throughput (via Firedancer).
• DePIN and consumer applications stand to benefit most from Solana’s design and potentially offer uncontested areas of growth due to the industry-leading costs and speed Solana offers.
• In an unweighted comparison to Ethereum, Solana narrowly gets beaten. However, weighing variables towards those enabling future business model innovation over current status leans the evaluation in Solana’s favor.
• Key concerns for Solana to overcome include lack of liquidity, catching up to Ethereum’s growing network effects, achieving persistent liveness, and more.
• An introductory look into a Multicoin valuation framework for Layer-1 tokens yielded a theoretical floor value of $15.91 for SOL. Further research will be needed to bring different assumptions into consideration.

(Originally published June 27, 2023 as Enterprise only and unlocked for Pro users February 21, 2024)