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overrated – or the real Ethereum killer?

Currently, one particular cryptocurrency is attracting almost all of the attention of the crypto community: Solana (SOL). Within the last 30 days, the SOL course has increased by more than 195%, based on the week it is currently still almost 38% – and in the last 24 hours Solana has recorded an increase of more than 11%. The coin is on a massive rally, making four new all-time highs in the past two weeks. It is hardly surprising that Solana is currently number 1 among trending cryptocurrencies on Coinmarketcap.com. No other coin is currently looking for more users. Many are now wondering: How high can Solana go? Is the rally real – or will there be a massive crash soon? There is a lot of light here – but also shade. What do analysts say about Solana’s current outlook?

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Glassnode: Solana could be grossly overrated

In a current analysis, blockchain data provider Glassnode deals with the four blockchains whose native tokens have increased the most in recent weeks. According to Glassnode, these are Solana (SOL, here to our description of the coin), Avalanche (AVAX), Terra (LUNA), and Cosmos (ATOM).

Glass node:

“Alternative smart contract platforms like Avalanche and Solana have seen massive 30-day token price spikes as signs of activity and betting on a multi-chain future begin to attract attention.”

The researchers explain in the analysis: Solana has the fifth largest TVL (“Total Value Locked” – the value of the capital tied up in the protocol) and the second largest market capitalization among the DeFi-focused chains, the highest ratio of market capitalization to TVL – “with large distance ”.

Solana’s monthly chart: one all-time high chases the next. Source: Tradingview.com

So for every dollar of TVL there would be $ 8 in market capitalization. This is unfavorable as it indicates a higher speculative premium. Put simply, the capital on the blockchain is below the actual valuation of the cryptocurrency. According to Glassnode, the Solana ratio is 8.3. Ethereum comes to 3.3. For Binance Smart Chain, on the other hand, it is 4.0, and for Avalanche it is 4.6.

The ecosystem lacks liquidity

The scientists’ bearish conclusion for Solana (SOL):

“This means that if we assume that the total value tied up in DeFi is an important metric for the valuation of a blockchain, Solana could be the most overrated according to this metric.”

The Solana ecosystem has financed numerous lending protocols. But none of them managed to attract significant liquidity, according to Glassnode:

“There are five projects in the Solana DeFi area that have more than $ 100 million in TVL. For comparison: Ethereum has over 60 projects with more than $ 100 million TVL.

Solana is “certainly an attractive alternative for projects that have to be scaled”. However, the cryptocurrency has so far “barely scratched the surface to compete with Ethereum for total liquidity”.

You can check out the full Glassnode analysis here.

Is Solana Better Than Ethereum?

Solana is considered an “Ethereum competitor”, some also consider the coin to be an Ethereum killer. In fact, Solana (SOL) has some advantages over ETH: For example, the cryptocurrency is extremely fast and extremely cheap. Both aspects that are often criticized about Ethereum. Solana, on the other hand, aims to develop a trust-free and permission-free protocol that enables high scalability. The developers claim: Solana is the fastest blockchain in the world – with a guaranteed throughput of 50,000 transactions per second (TPS). The developers promise: Ideally, with a minimum block time of only 400 ms, even more than 65,000 TPS are possible.

For comparison: Ethereum can currently process a maximum of 30 transactions per second. Credit card giant Visa, on the other hand, processes 1,700 transactions per second, theoretically 24,000 TPS should be possible. Solana has a lot of steam under the hood. Steam, which Ethereum obviously lacks without 2.0. However, with the upgrade to the next blockchain iteration, ETH 2.0, Ethereum should also become significantly faster: 100,000 possible transactions per second are promised.

As mentioned, Solana transactions are significantly cheaper than transactions on Ethereum. While the gas (that’s the name of the transaction fees in the Ethereum network) can cost hundreds or thousands of dollars when the Ethereum network is busy, Solana only charges $ 0.0015 per transaction.

The Ethereum, launched in 2015, has a huge lead compared to Solana (start: April 2020). As a result, the Ethereum blockchain also forms the basis for many applications and crypto areas. Including: decentralized finance (defi) and NFTs (non-fungible tokens). As Glassnode explains in the analysis: There are currently no real killer apps on Solana. NFT marketplaces in the Solana ecosystem (such as Solsea.io, Sollectify or Solible.com) should, however, benefit massively from the low fees. The NFT portals are already heating up, initial projects (such as the “Degenerate Ape Academy”) are very well received. That could be the beginning of an exciting development.

Solana (SOL) – what traders and analysts say

The ongoing SOL rally leaves many traders and investors in euphoria. The pseudonymous “ShardiB2” writes to its more than 154,000 Twitter followers: SOL was the easiest trade. At the same time, the trader comments: He would not ignore ETH.

The popular trader @CryptoTony_ is similarly bullish. SOL is undoubtedly one of his favorite trades, along with Cardano (ADA).

Crypto analyst “DLinkBull” shares his idea of ​​the “final part of the bull run” for Solana with his 16,000 followers. He also posts a chart on which Solana (SOL) will rise to $ 480 by the end of the year. That is almost a 5x, based on current prices. Beyond that, what do the current Solana predictions say?

Solana price forecast 2021-2028

Solana (SOL) is currently trading at $ 102.25 after several rallies, an increase of more than 11% in the last 24 hours. What do the popular forecast models for Solana predict?

  • CoinCodex.com is generally bullish on Solana. Accordingly, 26 technical analysis indicators signal bullish signals, compared to only 3 bearish signals.
  • WalletInvestor.com considers Solana to be an excellent long-term investment. The 1-year forecast predicts an increase to $ 168.87. The Solana 5-year forecast expects an increase to $ 452.67 by 2026.
  • DigitalCoinPrice.com predicts continuous price gains at Solana. With one exception: the SOL course could develop negatively in 2027. That being said, DigitalCoinPrice.com expects SOL to increase to $ 150 by the end of the year. SOL will not break the $ 200 mark until 2023 at a rate of $ 207. In 2025, Solana is predicted to climb to $ 305, and by the end of 2028 a rate of $ 449.94 is predicted.
  • Gov.Capital expects massive price increases at Solana (SOL). Solana initially sees the 1-year forecast rise to $ 208. Then Solana will begin a similar rise to Ethereum, and by 2026 Gov.Capital is predicting an increase to $ 1,404 at Solana! Based on the current price, this corresponds to an increase of 1,273%.

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Last updated on August 30, 2021

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Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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