Original Article Title: "When SOL's Market Cap Broke One Trillion, Let's Talk About Solana's Momentum and Restraints"

Original Article Author: Wenser, Odaily Planet Daily

On November 10, Coinmarketcap data showed that SOL's market cap once exceeded $1 trillion, surpassing at one point the traditional listed company Vanguard Group, ranking 192nd among 20,666 assets globally. On the 11th, according to data from the 8 marketcap website, SOL's market cap fell to $977.8 billion, with a 7-day increase of 27.83%, ranking 199th among 20,666 assets globally and 4th in cryptocurrency market cap. At the same time, practitioners from institutions such as Bitwise, Standard Chartered Bank, and Coinbase have all highly affirmed the future development of the Solana ecosystem.

In this article, Odaily Planet Daily will take readers on a journey to explore the mystery behind "Solana Breaking the Trillion-Dollar Market Cap."

Future Outlook Overview: Solana is the Future

Since facing the FTX scandal in 2022, the heat of the Solana ecosystem once dropped to freezing point, with the SOL price falling to below $10 (December 30, 2022). However, with the continuous construction by the official team and the continuous efforts of developers and projects in the Solana ecosystem, the Solana ecosystem eventually experienced a renaissance with the development of multiple sectors such as RWA, DePIN, DeFi, and Meme coins.

In addition, considering Solana's previous financing stages and "capital lineage," numerous investment institutions, traditional financial institutions, and even relevant departments in U.S. politics and economics have a positive attitude towards it. Many institutions and individuals have spoken out and supported the Solana ecosystem. The following are representative viewpoints:

The lowest point in SOL's price occurred in the 2nd month after the FTX scandal.

The ETF Store President: Predicts Several New Spot Cryptocurrency ETF Applications, Including SOL, Will Be Filed This Week

Nate Geraci, President of The ETF Store, stated: "It is predicted that issuers will submit several new spot cryptocurrency ETF applications this week, including XRP, SOL, ADA, etc. Assuming that multiple issuers are well prepared for the election results, it is now not a bad idea to be a bit aggressive."

Arthur Hayes: During the U.S. Election, Solana Will Be "High Beta Bitcoin"

BitMEX co-founder and Maelstrom Chief Investment Officer Arthur Hayes previously mentioned in early November that he is bullish on Solana before the U.S. election. He referred to it as "high beta Bitcoin" on the Unchained podcast. He explained that Solana is a good choice due to its strong liquidity, and if Bitcoin performs well, Solana is likely to rise as well.

Furthermore, Hayes stated that in the long run, it does not matter who wins the U.S. election because the primary impact on digital assets will be the Federal Reserve's decision on whether to cut interest rates on November 7.

Hayes also mentioned that he prefers SOL over ETH. He believes Ethereum is currently "too slow" in action and needs a narrative shift to change people's views on its recent underperformance over the past few months. He pointed out that Solana currently holds the "mind share," acts quickly, and when the market prospers, its performance is likely to surpass that of Bitcoin. Ethereum and Bitcoin have the same "beta value coefficient," and Solana may even have a slightly lower one.

Trump's Election Victory, Bullish for Solana and Bitcoin

Previously, with Donald Trump's victory in the 2024 U.S. election, numerous Trump-related tokens and prediction activities quickly emerged on the Solana (SOL) blockchain, highlighting the deep intertwining of blockchain with political events. Meanwhile, distinct from traditional polls, the decentralized prediction market Polymarket successfully predicted Trump's election victory by observing fund flows and changes in market sentiment, making it an effective reference for analyzing the political landscape.

Furthermore, some believe that Trump's successful reelection will lead to a crypto-friendly policy, directly benefiting Solana and Bitcoin. Solana, as an important platform for U.S.-based DeFi and NFT projects, will attract more innovative projects and funding inflow in a relaxed regulatory environment, potentially accelerating user growth and capital accumulation. Moreover, as a U.S.-based blockchain platform, Solana is expected to apply for a SOL ETF following Trump's reelection, further boosting its influence in the capital markets.

Coinbase: Solana's On-Chain Transaction Ecosystem Profit Second Only to Stablecoins and L1 Network Fees

In a report, Coinbase analysts pointed out that Meme tokens have been at the core of this bull market cycle and have been the best-performing cryptocurrency sector this year (measured by total market value growth). Most of the Meme coin activity has taken place on Solana, mainly revolving around the increasing popularity of pump.fun as the primary Memecoin launchpad. To date, over 3 million tokens have been issued on pump.fun. Solana's dominance in transaction-related activity on the network is reflected in its contribution to network transaction fees, accounting for over 82% of all non-voting fees paid on the network.

In addition to pure network fees, Solana's token issuance and transaction process also capture high value. If the Solana on-chain transaction ecosystem is seen as a "standalone financial category," it currently ranks third in profitability, behind only stablecoins and Layer 1 network fees. The report states: "Solana's transaction-related activity typically accounts for 75%-90% of on-chain transaction fees, far higher than other networks such as Ethereum, Base, and Arbitrum. While L2 solutions also show growth and innovation, they often face different scalability challenges and user fragmentation issues compared to Solana. Solana's fee dynamics and user activity patterns remain unique."

Bitwise CEO: Solana Market Cap Set to Exceed $100 Billion

On November 10, Bitwise CEO Hunter Horsley stated that Solana's market cap is about to exceed $100 billion, with only three crypto assets currently reaching this level (note: excluding USDT). That day, SOL's market cap indeed surpassed $100 billion as expected, ranking as the 4th largest crypto asset.

Standard Chartered Bank Analyst: New All-Time High for SOL Before Year-End Seems "Inevitable," Performance May Outshine Bitcoin

Standard Chartered Bank analyst Geoff Kendrick predicted that Bitcoin will continue to rise through the end of this year, easily reaching $100,000 before some Bitcoin options expire on December 27th. It's worth noting that he successfully predicted before the U.S. presidential election that Bitcoin's price would reach $80,000.

"I predict the year-end Bitcoin price will reach $125,000, which is the next level. Although I noticed that after the 2016 election, many Trump-related trades peaked around the January 20th inauguration... therefore, if Bitcoin fails to reach $125,000 by December 31st, I think it will by January 20th," Kendrick, the bank's head of FX and digital asset research, stated in an email last Sunday.

Kendrick further predicted that given the recent surges in Ethereum and Solana, Bitcoin's price increase could "benefit all investors," and some tokens may outperform Bitcoin. Kendrick wrote, "It seems inevitable that SOL will hit a new all-time high before the end of this year (the historical high set in November 2021 was $260). Achieving a new all-time high for ETH (which hit $4,866 in November 2021) may wait until around the inauguration ceremony. Overall, we believe these assets will continue to rise, but SOL's performance may be the strongest."

SOL/ETH Exchange Rate Recently Hits All-Time High

Previously, according to OKX market data, the SOL/ETH exchange rate reached 0.0724 on November 6, hitting an all-time high.

Considering the above perspectives and data, Solana's future looks bright, which naturally stems from its past performance and ecosystem efforts.

Solana Past Performance: The Versatile "Meme Coin Sanctuary"

Specifically, the outstanding performance of the Solana ecosystem in the past is mainly reflected in the following aspects:

Active Ecosystem: October Monthly Active Addresses Surpass 123 Million, Reaching All-Time High

Data shows that in October, Solana's monthly active addresses hit a historical high, exceeding 123 million. Compared to September, the number of unique addresses transacting on Solana increased by over 42%. In January of this year, the network had less than 12.7 million active addresses. Analysts state that the recent surge in Solana activity has been driven by the meme coin craze on the network, including support from platforms like Pump.fun and the decentralized exchange Raydium, both of which have experienced significant growth in the past few months.

Additionally, according to a16z's "Crypto Condition" report released in October, Solana had over 100 million monthly active addresses, while Ethereum and other EVM chains had only about 57 million, indicating higher user engagement on Solana.

Funds Migration: Over $600 Million Tokens Bridged to Solana From Other Chains in October, with Over 90% from Ethereum

According to SolanaFloor data, in October, over $600 million in tokens were bridged to Solana from other chains, with over 90% coming from Ethereum.

Active Trading: Solana's On-Chain DEX Volume Surpasses Ethereum in October

Based on Defillama data, in October, Solana's on-chain DEX trading volume reached $521.57 billion, surpassing Ethereum's DEX volume for the same period ($414.99 billion).

Funding Side Note: Solana Ecosystem Q3 DApp Cumulative Funding Reaches $1.73 Billion

According to a Messari report, institutional investment in Solana's native blockchain applications experienced a revival in the third quarter of 2024. 29 decentralized applications (DApps) based on Solana collectively raised $1.73 billion, a growth of over 54% from the previous quarter. Although the number of funding rounds decreased by 37%, these funds represent the largest investment on the Solana chain since the second quarter of 2022. Asset management giant Franklin Templeton is reportedly planning to launch a money market fund on Solana.

Offline Expansion: Solana Gift Cards Launched in Various Retail Stores in Switzerland

According to SolanaFloor, Solana gift cards have been launched in various retail stores across Switzerland. Once purchased and activated by users, the tokens are stored offline in the Cryptonow wallet. This move indicates Solana's significant efforts in offline market expansion.

Liquidity Injection: cbBTC Goes Live on Solana

In a previous announcement, Coinbase revealed that its cbBTC has gone live on Solana, making it Coinbase's first token issuance on Solana.

Meme Coin Hub: Total Market Cap of Meme Coins on Solana Surpasses $15 Billion, Reaching an All-Time High

According to the latest data disclosed by Solana Floor, the total market capitalization of Meme coins on Solana has exceeded $15 billion, hitting a historic high.

Regarding the future development of the Solana ecosystem, its official team appears confident, but the future still poses significant challenges.

Solana's Future and Concerns: Large-Scale Composability vs. Centralization of Power

Regarding the future direction of the Solana ecosystem, Solana's co-founder Anatoly Yakovenko previously provided detailed insights in an interview.

He mentioned Solana's unique position in the blockchain space and compared its deployment to L2 scaling solutions and other L1 blockchain systems.

The Dual Nature of Solana: Navigating the Path to Achieving Large-Scale Composability

Previously, Anatoly Yakovenko posed the question: "What would the vibrancy of the Ethereum ecosystem look like without the contribution of an L2 solution like Base?"

This question was raised while observing Base's growth metrics, especially in terms of user activity and transaction volume. He then went on to elaborate: "In my view, scalability, infrastructure focus, and transaction efficiency are Solana's three main advantages," while also recognizing the challenges that Solana faces in the ever-evolving landscape of blockchain technology and platform development.

Yakovenko emphasized Solana's unique architecture, which aims to democratize access to transaction validation. Unlike traditional finance, Solana allows anyone to set up a validator and directly submit transactions, bypassing intermediaries. This level of decentralization is hard to replicate in traditional finance. While this functionality exists, he also acknowledged that effectively scaling it remains a hurdle.

Yakovenko compared Solana to Ethereum and various L2 solutions, highlighting the trade-offs between L1 and L2. L2 solutions typically use centralized sequencers for low-latency transaction ordering. However, these may lead to congestion issues similar to those on the L1 chain. While L2 is often seen as a short-term congestion solution, it faces scaling bottlenecks when multiple applications or markets use them.

He stressed that Solana's strategic focus is on building a robust L1 chain that can support high throughput without the need for L2 solutions.

Another key factor is synchronous composability, where multiple applications can interact in real-time on a single chain. He believes this is crucial for DeFi as a single-chain or application-specific L2 cannot support this level of composability, thereby limiting scalability. Solana's final competitive advantage lies precisely here: its full dedication to large-scale synchronous composability, setting it apart from Ethereum and L2 chains.

Furthermore, Solana's strength lies in execution. While Ethereum is expanding through L2, Solana's development remains focused on making its L1 flawless. He acknowledged that one day, blockchain will offer functionality similar to Solana and provide faster iterations, but for now, Solana's improvement pace puts it far ahead of its competitors. The core of Solana's potential lies in perfecting its infrastructure to support a more equitable, open transaction processing to realize a truly decentralized future, making Solana one of the leading blockchains in the coming years.

Of course, the issue of centralization of power remains one of the external market's concerns about the Solana ecosystem. A recent representative viewpoint on this matter is related to Edward Snowden.

Edward Snowden: Calls for Solana Decentralization, Questions VC Influence on Solana

Edward Snowden, the whistleblower of the "Prism Gate," discussed the issue of decentralization at the Near Redacted conference held in Bangkok, Thailand. When mentioning topics such as cryptocurrency, artificial intelligence, and blockchain technology, Snowden used Solana as an example and discussed the influence of VCs on blockchain projects. He described Solana as "born in prison" because it received a significant amount of VC funding, implying that funding support might hinder its ability to operate the blockchain network independently.

While he acknowledged Solana's rapid growth, he also expressed concerns about too much ownership being handed over to investors. However, he also pointed out that Solana may have a "promising future."

Conclusion: Solana's Ecosystem Endgame Is Far From Over

As of the time of writing, Solana's price has returned to around $210, and its market cap has once again approached $100 billion. According to information from the 8 marketcap website, Solana's market cap is currently about 6.18% compared to Bitcoin and about 26.17% compared to Ethereum.

With the potential of ETH, DeFi, and many more fields being explored later on, the Solana ecosystem may have the opportunity to truly compete with Ethereum and become a true "Ethereum killer."

Solana vs. ETH vs. BTC Market Cap

Original Article Link

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia