Bitcoin
BTC$16 850.61

2.23%

Ethereum
ETH$1 264.86

4.07%

Tether
USDT$0.999917

0.02%

Binance Coin
BNB$299.27

-1.26%

USD Coin
USDC$0.999988

-0.01%

Binance USD
BUSD$1.000272

0.01%

Reasons why Solana (SOL) price could see additional upside in 2022


24 Dec 2021

#Solana

Steady ecosystem growth, institutional investment and a healthy derivatives market are strong signals that SOL will continue to be a top contender in 2022. Solana (SOL) has become a top contender in the smart contract industry and in the past year, the network's total value locked (TVL) grew by $660 million and stretches across more than 40 decentralized applications to hit an all-time high above $11 billion.

Even with this growth, investors have reason to question whether the current $56 billion market capitalization is justified and how it compares to competing networks like Binance Smart hain (BNB), Avalanche (AVAX) and Polygon (MATIC).

By analyzing the past six-month price performance, there's an apparent decoupling from Terra (LUNA), Solana and Avalanche when compared to other smart contract platform competitors.

There is strong institutional appetite for Solana's ecosystem

Solana's market capitalization is more than double that of Avalanche and Terra, each of which has a $26 billion market cap. Searching Solana's latest news on Cointelegraph yields an exciting array of institutional investments, ranging from the $314 million private token sale by Solana Labs in June, to an $18 million fundraise in September by Solana's DEX project Orca.

There's solid evidence of a growing ecosystem judging by investor appetite. However, to understand how successful Solana's scalability solution is, we have to evaluate its usage metrics.

Looking at the number of active addresses on Solana's DApps is a good place to start. Ethereum's leading DApp by active addresses is Uniswap, which has 188,200. Therefore, Raydium’s 97,600 weekly users is rather impressive, considering it was launched just 10 months ago. Meanwhile, back in Feb. 2021, Uniswap already held over $4.3 billion TVL.

As for Solana’s NFT marketplace Magic Eden, its 58,400 weekly active addresses also account for more than half of Ethereum’s OpenSea, the sector’s absolute market leader in volume and users activity.

Avalanche user activity is highly concentrated on the Trader Joe decentralized finance app, but its $715 million weekly volume pales in comparison to Uniswap’s $22.1 billion or Raydium’s $12.5 billion. The same can be said by Polygon, which has $573 million in trading activity at its QuickSwap DEX.

Solana has the third largest futures market

Solana currently holds the third largest futures open interest, which is the most relevant metric in derivatives contracts. This indicator aggregates the total number of contracts held by market participants regardless of the recent trading activity. Despite the sharp drop since the Nov. 8 peak at $1.9 billion, the current $860 million futures open interest ranks Solana the third derivatives market by size. For example, Binance Coin (BNB) futures holds $520 million, followed by Terra (LUNA) with $430 million.

Undoubtedly, there's an impressive amount of activity coming from Solana's on-chain data and derivatives markets. The network’s TVL increased by 15x over the past six months and Solana's DApps users is nearly half the amount of users on the Ethereum network.

Solana seems to be quickly closing the gap in three important metrics: TVL, active users and derivatives markets. Competitors like Terra, Avalanche and Polygon seem a long way behind, which possibly justifies the market capitalization premium.


Related

The third wave of a crypto bear market
The third wave of a crypto bear market
Solana and Moonbirds help NFT market reach $6.3B monthly trading volume
Solana and Moonbirds help NFT market reach $6.3B monthly trading volume
Solana NFT marketplace integration and DApp metrics shine even after SOL’s 20% drop
Solana NFT marketplace integration and DApp metrics shine even after SOL’s 20% drop
Solana NFT sales pass $1.6B, wash trading on LooksRare and more
Solana NFT sales pass $1.6B, wash trading on LooksRare and more
Solana jumps past key selloff junction: SOL price eyes $150 in April
Solana jumps past key selloff junction: SOL price eyes $150 in April
Coinbase Wallet adds support for Solana
Coinbase Wallet adds support for Solana
Solana-based Zebec Protocol closes $15M Series A round
Solana-based Zebec Protocol closes $15M Series A round
Solana network outages show work still needed
Solana network outages show work still needed
Solana on-chain development increases after a recent DDoS attack
Solana on-chain development increases after a recent DDoS attack

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 61.2% 80 $16 850.61 2.23% 2.05% $323 880 775 090 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 65.2% 79 $1 264.86 4.07% 8.41% $154 786 411 293 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 94.4% 1 $0.999917 0.02% 0.08% $65 357 268 959 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 70% 67 $299.27 -1.26% 0.72% $47 873 891 086 BNB 7 days price change
5 USD Coin (USDC) USDC USD Coin predictions 94.8% 1 $0.999988 -0.01% -0.02% $43 305 846 022 USDC 7 days price change
6 Binance USD (BUSD) BUSD Binance USD predictions 92.4% 1 $1.000272 0.01% 0.02% $22 171 401 519 BUSD 7 days price change
7 XRP (XRP) XRP XRP predictions 64.8% 66 $0.400157 1.69% 6.60% $20 123 918 447 XRP 7 days price change
8 Dogecoin (DOGE) DOGE Dogecoin predictions 60.8% 85 $0.105031 1.44% 29.90% $13 934 589 528 DOGE 7 days price change
9 Cardano (ADA) ADA Cardano predictions 59.2% 81 $0.314538 1.02% 0.17% $10 833 319 810 ADA 7 days price change
10 Lido stETH (STETH) STETH Lido stETH predictions 93.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
11 Polygon (MATIC) MATIC Polygon predictions 62.4% 72 $0.868577 3.45% 1.53% $7 586 427 443 MATIC 7 days price change
12 Polkadot (DOT) DOT Polkadot predictions 68.4% 67 $5.39 1.58% 0.44% $6 144 181 845 DOT 7 days price change
13 Dai (DAI) DAI Dai predictions 91.2% 1 $0.999740 0.01% -0.01% $5 653 688 069 DAI 7 days price change
14 Litecoin (LTC) LTC Litecoin predictions 62.8% 74 $78.05 1.92% -0.16% $5 598 468 272 LTC 7 days price change
15 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 69.2% 66 $0.053816 0.24% 5.92% $5 471 826 904 WTRX 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2022 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.