Solana (soil) Currently represents 15% of the market capitalization of the intelligent contract platform (SCP), projections indicating an increase to 22% by the end of 2025, which could bring the soil price to $ 520, according to a recent report of Vaneck.
The expansion of Solana’s market capitalization is drawn by its strong presence of developer, increasing the share of decentralized exchange volumes (DEX), increased income and active user base.
Vaneck’s evaluation model links the SCP market share of Solana to the growth of the American money supply, which is historically correlated with cryptographic market capitalization. M2 includes species, verification deposits and short-term investments and serves as a large money mass measure in the United States and the euro zone.
The M2 monetary mass is expected to reach $ 22.3 billions by the end of 2025, now an annualized growth rate of 3.2% since October 2023.
The regression analysis suggests that total market capitalization will increase by 43% to 1.1 dollars by the end of 2025, exceeding its 2021 peak of $ 989 billion.
Using an autoregressive model (AR), Vaneck estimated that the Solana market capitalization could reach around $ 250 billion. With 486 million floating tokens, this implies a soil price target of $ 520.
Scaling income
Solana acquired importance among the blockchains of the layer-1, leading to DEX volumes (45%market share), chain income (45%) and daily active wallets (33%) in January 2024.
Vaneck projected that Solana’s expected income may reach an annualized rate of $ 6 billion if the current trend continues. Network income comes from three primary sources: basic costs, priority costs and maximum extractable value (MEV).
Basic costs represent the cost of using the minimum network and represented 1% of Solana’s income in January. Meanwhile, priority costs are the advice that users pay for faster transaction inclusion, totaling 43% of network income.
MEV represented most of Solana’s income last month, because 56% were obtained thanks to the costs won by block manufacturers optimizing the execution of transactions.
Boosting Mev
The SOLANA MEV income structure allows block manufacturers to capture 60% of the MEV value, validators retaining 40%. If the validators capture 80% of MEV, reflecting the structure of Ethereum, revenues derived from the MEV could drop from $ 3.4 billion to $ 6.8 billion, a 56% increase in soil validator income.
The report pointed out that improvements in the Jito Solana system, improvements in the protocol and the implementation of Firedancer could further facilitate growth.
However, in its current state, the Solana’s MEV capture is ineffective due to private memory pools and initiates.
About 92% of validators use the Jito Mev auction software, but many are also engaged in private Mempools, giving certain merchants a competitive advantage. The resolution of this problem could improve the capture of Solana’s MEV income.
The report proposed solutions, including valid white lists to prevent collusion, MEV protections at the application level to reduce the leading systems, RFQ (request for the quote) to improve the transparency of the prices on Dex and software fixes to alleviate known attack vectors.
In addition, a multi-lead model allowing several validators to offer blocks would reduce the dominant influence of the block manufacturer.
DAPP growth
The Solana’s application ecosystem has expanded, exceeding Ethereum in the income of decentralized applications. In 2022, Ethereum Dapps generated 84% of all income, while Solana represented 0.26%. By 2024, Ethereum’s share fell to 32%, while Solana increased to 42%.
The income of the Solana DAPP increased from $ 4 million in 2022 to $ 1.25 billion in 2024. The network has also become a main destination for developers, adding 7,625 new developers in 2024, against 6,456 of Ethereum.
If the MEV optimizations are successfully implemented, the income of Solana validators could increase considerably, supporting greater soil demand and positioning its price above $ 500 by the end of the year.
Mentioned in this article
