Solana (SOL) has change into a prime contender within the sensible contract business and up to now yr, the community’s whole worth locked (TVL) grew by $660 million and stretches throughout greater than 40 decentralized functions to hit an all-time excessive above $11 billion.
Even with this progress, buyers have cause to query whether or not the present $56 billion market capitalization is justified and the way it compares to competing networks like Binance Sensible hain (BNB), Avalanche (AVAX) and Polygon (MATIC).
By analyzing the previous six-month value efficiency, there’s an obvious decoupling from Terra (LUNA), Solana and Avalanche when in comparison with different sensible contract platform opponents.
There’s sturdy institutional urge for food for Solana’s ecosystem
Solana’s market capitalization is greater than double that of Avalanche and Terra, every of which has a $26 billion market cap. Looking Solana’s newest information on Cointelegraph yields an thrilling array of institutional investments, starting 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 strong proof of a rising ecosystem judging by investor urge for food. Nonetheless, to know how profitable Solana’s scalability resolution is, we have now to judge its utilization metrics.
Wanting on the variety of energetic addresses on Solana’s DApps is an effective place to begin.
Ethereum’s main DApp by energetic addresses is Uniswap, which has 188,200. Due to this fact, Raydium’s 97,600 weekly customers is reasonably spectacular, contemplating it was launched simply 10 months in the past. In the meantime, again in Feb. 2021, Uniswap already held over $4.3 billion TVL.
As for Solana’s NFT market Magic Eden, its 58,400 weekly energetic addresses additionally account for greater than half of Ethereum’s OpenSea, the sector’s absolute market chief in quantity and customers exercise.
Avalanche person exercise is extremely targeting the Dealer Joe decentralized finance app, however its $715 million weekly quantity pales compared to Uniswap’s $22.1 billion or Raydium’s $12.5 billion. The identical may be stated by Polygon, which has $573 million in buying and selling exercise at its QuickSwap DEX.
Solana has the third largest futures market
Solana at present holds the third largest futures open curiosity, which is probably the most related metric in derivatives contracts. This indicator aggregates the overall variety of contracts held by market contributors whatever the current buying and selling exercise.
Regardless of the sharp drop for the reason that Nov. 8 peak at $1.9 billion, the present $860 million futures open curiosity ranks Solana the third derivatives market by measurement. For instance, Binance Coin (BNB) futures holds $520 million, adopted by Terra (LUNA) with $430 million.
Solana leads in TVL, customers and derivatives markets
Undoubtedly, there’s a powerful quantity of exercise coming from Solana’s on-chain knowledge and derivatives markets. The community’s TVL elevated by 15x over the previous six months and Solana’s DApps customers is almost half the quantity of customers on the Ethereum community.
Solana appears to be shortly closing the hole in three essential metrics: TVL, energetic customers and derivatives markets. Rivals like Terra, Avalanche and Polygon appear a good distance behind, which presumably justifies the market capitalization premium.
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