Similar to the companies that issue stocks, blockchains that issue cryptocurrencies can be analyzed based on the amount of the income they have achieved. Assets with more sales and more sales growth should be better investments than those without.
Through this standard, Solana(Crypto: Sol) It is worth considering as a potential investment. Alone on September 18, it is Decentralized applications (DAPPS) achieved sales of around 6.9 million US dollars, more than the next 10 chains and almost three times the next largest competitor of the day. This certainly increases the case for the purchase, but if this fact is inserted into the context, investors will also find some reasons to be a little careful here.
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Before you get into the weeds, we start with a quick definition. In this context, “application income” is the sum of the income that is achieved by apps in a chain that differs from the base Gas fees. According to Convention, the Metrik StableCoin emitters, liquid insoles and gas itself excludes. It is a fundamental measurement of the level to which actual users pay apps for their services.
When Solana’s apps brought in millions of dollars over a period of $ 24 hours and not only exceeded its greatest competitors, EthereumBut the rest of the field overall it was a big deal. It is even more important that in the last 30 days the total application turnover of Solana of 211 million US dollars was more than twice Ethereum, so these results were not just a Blip.
If you want to have a reason to buy Solana now, this is: There are customers who consistently pay for using applications in his chain, and much more of them than in any other network.
But why is that important in the larger scheme of things? The main reason is that the income of apps tends to be composed.
When app developers see users who pay for services, they are strongly stimulated to manufacture and send more products to this venue. Then the growth shifting wheel rotates even faster than customers see that they can satisfy several requirements within the same ecosystem. In Solana, so many developers will perceive growth.
Investors should also understand how this value generation Solana itself and application -related tokens.
In short, the income from registrations is primarily created by the applications and their government bonds or token owners, not directly to Solana holder. Nevertheless, more use generally increases the demand for block space and the fee markets of the network. A customer’s demand for Solana App Services requires that you buy and hold Solana to cover your fees. In other words, the owner swinging wheel of Solanas is more indirect than in chains that burn a larger part of the fees, but strong income of apps still signal a healthy economy that can attract capital and talent, and more activities in the chain lead to more demand for the coin and thus drives the price higher.
There is an important catch with Solana’s application income. Many of the applications that generate the largest proportion of the network’s income do not focus exactly on serious business areas.
In fact, a large amount of Solana’s application income currently depends on applications that rationalize the start and trade of meme coins that are cyclical, highly speculative and often simply a representative for gambling. This makes sense because Meme coins made around 70% of the decentralized exchange volume of Solana, with over 60% of the income of Solana app closely related to the investment of Meme Coin. If the market conditions become a little less frothy, this volume and these income will probably dry out quickly.
Does Solana make you indefinite? Not at all. This only means that investors should be aware that the casino-like projects that are currently most successful. Casinos can be profitable, but it is still important to recognize that you (at least partially) buy part of you by buying Solana.
Assuming that the sales mix is gradually expanding and is likely-Solana can convert today’s traffic into longer and more serious segments and adhere to its mindshare among developers. If its mixture remains excessively dependent on Meme coins, it can be a fleeting trip, and the upward trend of the crypto can have a lower cap.
The investment thesis for the purchase of this coin is still based on the real economic signal that users use apps on a scale in this chain and with a much higher sentence than they do elsewhere. There are many reasons to be optimistic of Solana in the future, so that the risk and reward are still strongly tilted here.
One way to have your cake and also eat it is to accept a long period of time and limit yourself to a modest position size, at least until there is clear evidence that the ecosystem expands a little. Until then, they remember that casinos would not be so big and opulent if they could make money difficult.
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Alex Carchidi Has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The colorful fool has one Disclosure policy.
