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GM! Welcome to Milk Road PRO – your weekly crypto dive that’s sharper than a Solana price dip. 😬 |
Solana's price has dropped 35% since its peak in March. |
Despite the dramatic price drop, we believe $SOL is poised for a major breakout. |
Why? Because the fundamentals of Solana are continuously improving. 📈 |
The divergence between the price and fundamentals creates an incredible opportunity. Check out this chart which highlights our thesis. |
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The price is dropping while fees are not, and there are some key developments which make Solana even more promising. |
Imagine this: You buy a software business. The numbers (users, revenue etc...) look great, and your software keeps improving, but the price of your company is dropping. |
What do you do? 🤔 |
Actually hold on. Let's revisit all the numbers and key improvements ourselves before we answer that. We will share our answer at the end of this report. ⤵️ |
As investors, we should remain objective about our holdings and constantly challenge and revisit our investment thesis. |
In today's edition, we will: |
📊 Examine the onchain fundamentals on Solana 🚀 Identify the latest bullish developments on Solana 📉 Explore the price action of $SOL 🔮 Share where we think the price of $SOL goes next
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By the end of this report, you'll know everything about the current state of Solana. So, get comfortable and let’s dive into the blockchain data first! |
ONCHAIN METRICS 📊 |
When the price of an asset falls by 35%, the first thing we want to do is take a look at the fundamentals to see if anything has changed. |
When analyzing a blockchain, certain metrics are crucial. Today we are going to look at these metrics: |
Blockchain fees Monthly Active Users Wallets (MAW) Trading Volume Stablecoins in circulation
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If you don't know why each metric is important or how we should translate the data, don't worry. |
Before diving into each one, we’ll explain why it’s important and what insights we're looking for. |
1️⃣ Fees generated on Solana. |
Blockchain fees are a key indicator of the blockchain's utility. Think of fees as the price for using onchain products. |
When users are willing to pay transaction fees, it demonstrates that they find value in the products provided on that blockchain. |
And that's the goal of every blockchain - provide as many useful products as possible so people come over and use the products. |
Higher fees signal greater usage and demand, reflecting strong user engagement and adoption. |
In short, the more fees generated, the better. So let's have a look at the fees on Solana overtime. |
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Since March 2024, Solana's fees have remained high – around $80 million/month. Even though the market has cooled down, the fees have not decreased. 🔥 |
But these numbers themselves are really hard to interpret without knowing how much fees are paid on other blockchains. So let's compare fees on other blockchains. |
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Solana began the year 2024 with $11 million in fees and last month generated about $50 million (excluding MEV), marking a 5x increase. |
Compared to other major blockchains, Solana ranks fourth in fee generation, behind Ethereum, Tron, and Bitcoin. |
❗This is a very positive sign for the Solana blockchain, indicating sustained user activity and engagement. |
2️⃣ Monthly active wallets (MAW). |
We look at this because we want to see that there are still some active users on the blockchain and ideally more new users are coming. |
