Summary Solana's DeFi ecosystem offers lower fees than Ethereum and centralized exchanges, making it a strong contender in the decentralized finance space. SOL adoption is growing exponentially, with 50% of DeFi users and 78% of transactions on Solana, driven by efficient and user-friendly DEXs. Despite SOL's current underperformance compared to Bitcoin, its strong network growth and potential for future altseason make it a compelling investment. With Trump’s victory, a positive scenario could unfold for the crypto world, and Solana is showing strong momentum. Now I'm here to speak with you as a viewer, or, to use crypto slang, something like an external “TradFi investor” trying to ride the waves of the deep crypto space. Have you heard about decentralized finance (DeFi)? Some of you might be thinking, “wake up, boomer,” while others, more seasoned, might say, “you’re wasting your time.” Now, I’d like to take a neutral stance, not as a "mooner" or "degen," and not as a "banker", to share my in-depth experience in a particular corner of the crypto space: Solana (SOL-USD). I've been exploring this microcosm since before the "FTX collapse," observing the evolution of this blockchain as a viewer. In my opinion, despite its still "unripe" state, it deserves serious consideration, now more than ever, due to the potential emergence of a "Trump era" for the crypto market. But does it also deserve a place in a portfolio? Let’s analyze that. Solana is taking over the decentralized landscape. My assumption is based on a simple perspective: if Solana performs better than its peers, its adoption rate will likely increase, allowing SOL to capture market share from the native tokens of other blockchains. So, what is happening on-chain? While Ethereum is the most common altcoin, we must acknowledge that it faces serious competition with the rise of Solana, as the trend of 'new users' clearly illustrates. BNB -SOL; New user (Dune.com - @springzhang) While new user growth for BNB and ETH fluctuates, SOL adoption is experiencing exponential growth, surpassing other blockchain solutions. And this is a trend that has been noticeable in the crypto landscape since October 2023. Solana Monthly New Users Growth (Dune.com - @springzhang) However, what is happening now is a truly exponential growth in monthly users. In fact, looking at more recent analyses (30-day and 90-day), Solana now dominates the decentralized market, with 50% of DeFi users on Solana. 30 Days Users Total (Dune.com - @springzhang) And approximately 78% of total transactions. 90 days transaction total (Dune.com - @springzhang) This growth is due to the increasing ease and convenience of operating on its blockchain, as well as a strong network of highly efficient and user-friendly DEXs, like Raydium , which is now growing significantly in popularity. Solana USD volume (Dune.com - @ilemi) And this is also due to an extraordinary increase in new token listings , similar to what happened during the 2021 bull run on Binance Chain , where, with BNB, you could trade “shitcoins.” However, Binance Chain is not a decentralized chain, and over time, the market first shifted decentralized transactions to Ethereum and now to more efficient blockchains like Solana. New Trading Tokens (Dune.com - @ilemi) This is evident today, as volumes on Solana reached new highs in October, and the crypto world is now using SOL to participate in decentralized transactions. USD Volume All Chain DEX (Dune.com - @ilemi) And there’s been significant growth in stakeholders, with particularly interesting growth from Coinbase Cloud 02. Solana validator Stake Delegated (Dune.com - @ilemi) To summarize, since October 2023, Solana has embarked on a strong growth trajectory in terms of adoption of its blockchain. However, in October 2024, an unusual surge in usage around Solana emerged. Did the "Trump era" also mark a new era for the crypto world? Maybe, but what are the risks? Solana is highly correlated with Bitcoin’s price, like other altcoins in the crypto space. However, at the moment, SOL is underperforming compared to Bitcoin, while BTC/USD is being strongly pushed upward by the outcome of the U.S. election, with Trump as the winner. A Trump victory could bring positive outcomes for the crypto space, which is why investors are now focusing on BTC rather than altcoins. We’re currently experiencing a “Bitcoin season,” when BTC tends to perform better than altcoins. Alt Season index (coinmarketcap.com) Indeed, while BTC/USD is now reaching a new all-time high, SOL/USD remains within its channel, between $125 and the $200 range. It's particularly interesting that the price of SOL has stopped just below that level, despite SOL adoption having grown over the last month. SOL/USD - BTC/USD (TradingView) And here, it becomes important to talk about the 'Trump trade.' A positive outcome for Bitcoin, resulting from a Trump victory, could set the stage for an altseason. It’s possible, and if it happens, SOL is currently the native blockchain token with the most momentum, though it has lagged behind Bitcoin’s performance. Risk If this appears to give SOL an edge when the next altseason arrives, the strong connection to Bitcoin could also pose a risk. This is because it’s still unclear what Trump might ultimately decide regarding the crypto space . For that reason, I prefer to focus my analysis on Solana-specific risks; another classic bubble burst could occur. This has happened before, as seen with the collapse of FTX , a major stakeholder, and could happen again with the launch of a superior blockchain. The crypto market has a short memory, and the decentralized market could easily shift away from Solana with just one click. We must keep in mind that the crypto world is extremely dynamic, and today’s situation can be very different tomorrow. However, I believe that NOW, SOL/USD is once again well-positioned within the crypto world. Conclusion In conclusion, I give a BUY rating for SOL-USD due to the incredible increase in utilization of the Solana Network during this period. Even if altseason seems far off and Bitcoin remains at the center of the crypto world’s attention due to the 'Trump trade,' SOL is capturing even more “market share” compared to others while maintaining a similar risk profile. But remember, the crypto world never stands still, and today’s considerations could radically change in a short time.
