Solana is looking smart for 2022

The Cointelegraph Altcoin Watch offers some good news for Solana (SOL) holders as we reach the end of 2021. The current crypto market may be down, but it is certainly not out, and some commentators believe Solana could become a “top contender” in the smart contract industry next year.

If you don’t own SOL, now might be a good time to buy, and if you own some, then it might be a time to HODL. Over the past year, the Solana network’s total value locked (TVL) increased by $660 million and it is used by more than 40 decentralised apps “to hit an all-time high above $11 billion.”

Cointelegraph does point out that while the Solana network has experienced impressive growth, “investors have reason to question whether the current $56 billion market capitalization is justified,” and may be wondering how it compares to its main competitors, Binance Smart Chain, Avalanche and Polygon.

Institutions favour Solana

To start with, Solana’s market cap is double that of Avalanche, which has a $26 billion market cap. There is also the fact that Solana has enjoyed “an exciting array” of institutional investments in 2021, including the $314 million private token sale by Solana Labs, and an $18 million fundraise through Solana’s DEX project ORCA.

Its ecosystem is also growing and that is encouraging investors’ appetites. On the other hand, it is important to consider the likely success of Solana’s scalability solution and its usage metrics. To do this, you can look at the number of active addresses on Solana’s DApps. For example, Uniswap is the leading DApp with 188,200 active users on the Ethereum network, whereas Raydium, the leading DApp on Solana has 97,600 weekly users. You might think this puts Solana at a disadvantage, but considering Raydium only launched in 2021, it’s really a very impressive figure.

Solana’s NFT marketplace, Magic Eden, has 58,400 weekly active addresses, which is just above of the number on Ethereum’s OpenSea, which is the market leader. So, Solana is catching up.

Finally, Solana now “holds the third largest futures open interest, which is the most relevant metric in derivatives contracts.”

There is an exciting amount of activity coming from Solana’s on-chain data and derivatives markets, and its TVL increased by 15x over the last six months. It is outperforming Avalanche, Polygon and Luna on three important metrics: TVL, active users and derivatives markets.

Things look good for Solana (SOL) in the coming year.

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