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Coin analysis: Solana 🚀🚀
14 April 2023
The newsletter is put together by Giottus Crypto Platform and The News Minute’s Brand Studio. You can read all the previous issues of Cryptogram
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Hello there,The beauty that is Bitcoin at $30k. Strong resistance – to the profit bookers. It yo-yoed around the $30k mark all week, but held steady above that level for most of it, perhaps signaling a stronger rally up ahead. And with ETH roaring past $2k, thanks to Shapella, and many other altcoins doing well, our excitement simply cannot be understated. Looks like we have momentum!But, like we say all the time, proceed with caution. Our lead piece today is a coin analysis of Solana, which is a great example of how you should DYOR as you invest ahead.
Here are the Top 5 stories of this issue.
1
. The hard-fork will enable users to withdraw their staked ETH, which they were unable to do until now. This has unlocked $34 billion in staked ETH.
2
Social investing platform
users directly on the platform through an arrangement.
3
London Stock Exchange Group’s clearinghouse arm, LCH, will offer
.
4
Indian Union Finance Minister Nirmala Seetharaman says
.
5
Solana Mobile has announced its first Android device, Saga, designed to integrate the Web3 experience onto our mobile phones seamlessly.
WEEKLY MACROS
Total crypto market cap - $1.29 trillion -
5.8%
Bitcoin market cap - $598 billion -
10.9%
The dollar index (DXY) - 100.86 -
1%
Bitcoin Dominance - 46.4% -
5%
Crypto Fear and Greed Index
- 68 - The market is in greedy condition
WEEKLY PRICE TRACKER
Price movements from last Friday
BTC Watch
10.9% with bulls stepping up to support the crucial $30,000 level and in addition to Twitter's partnership with crypto trading platform eToro
ETH Watch
12.68% registering a 11-month high amid successful Shapella upgrade that occurred couple of days ago
Altcoins Watch
SOL
:
22% ahead of the highly anticipated Solana Mobile Saga launch
APT
:
12% as technicals coupled with BTC's price action has led to a mini breakout
CFX
:
8% as China narrative picks up pace post Hong Kong banks interest to tie up with crypto companies
WHAT'S HOT
Coins to watch out for
Solana (SOL)
is designed to facilitate decentralized app (DApp) creation. It aims to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain. SOL, the native token of Solana, has seen double digit gains in the past 24 hours as bulls turn up ahead of the highly anticipated Solana Mobile Saga launch. SOL is trading near $25.
Rocket Pool (RPL)
is a decentralized Ethereum staking pool offering up to 4.33% APR for ETH2 staking. Rocket Pool essentially offers anyone to participate in ETH2 staking, regardless of their capital investment or level of technological sophistication. Whales have been purchasing RPL in the last few weeks. RPL is currently at $44
Project to watch out for
Raydium (RAY)
is an automated market maker built on the Solana blockchain that shares liquidity with the Serum decentralized exchange. Users who provide liquidity to Raydium are incentivised with rewards in RAY. By bringing together the flexibility of an AMM with the reliability of Serum's more traditional order book mechanism, Raydium supports the fast, liquid and low fee trading of digital assets on Solana with an additional source of liquidity.
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THE HOT TAKE
Solana’s 150% streak and what it means for investors
Solana, a darling of the 2021 bull market, had a spectacular fall in November given its association with FTX. It is now trading at $24.8 - more than 150% up from the low of $9.6. It has broken the trend of falling against BTC recently and continues to gain adoption (transactions, wallets etc) while sorting out its tech issues. What’s ahead for this asset and what can investors plan for? We track some trends below.
1. Among Layer 1s and 2s, Solana currently ranks 2nd in monthly active addresses
Solana blockchain, with 5.8 million addresses, maintains a distinct lead in terms of monthly active addresses after BNB Chain. This indicates that usage and adoption continues to be robust in spite of issues in recent past.
Source: Nansen
2. This has led to higher transaction volumes on the network
Benchmarked against key competitors (Ethereum Layer 2s), Solana maintains a distinct lead in terms of daily transactions in the last 180 days. The trend also seems to be going up.
3. It seems to have addressed network downtimes recently
Although Solana gained a reputation for having network problems in the past year, its team has have tried to identify and solve issues that plagued the network in the past.
That said, its recent outage occurred on 25 February, resulting in transaction disruptions and leading to a network restart.
Source: Messari
4. NFTs are Solana’s USP
Solana gained voice as one of the favoured blockchains for NFT trading given its lower costs and faster implementation compared to Ethereum. This took a hit post November as some of its top NFT partners migrated to Polygon and Ethereum.
To tackle this trend, Solana recently unveiled a “State Compression” technology, through which minting costs for NFTs can be lowered further to a significant level. A comparison of transaction costs for minting NFTs is below:
Source: Coingape
Given the above, what does the asset hold for its investors? SOL has to perform better than BTC
A quick look at the SOL/BTC chart indicates that SOL has been in a macro downtrend against BTC over the last few months. It is down nearly 50% in the last 6 months.
Essentially, SOL being a higher risk asset, must do well against BTC to be worthwhile investing in. Else investors can stick to BTC instead to safeguard their portfolios. The downtrend seems to have been broken this week, though. If this trend sustains, SOL becomes a solid diversifying asset within a crypto portfolio.
Source: TradingView
The above also predicates that BTC and ETH continue to rally well into April and May – an altcoin doing well when the market is healthy is not new. But can SOL beat the market when things aren’t going well? Its competitor, Polygon (MATIC), seems to be a safer bet going by 2022 data – though in 2023, SOL has outperformed.
Source: TradingView
Overall, Solana is still reeling from their association with Sam Bankerman Fried and FTX. According to
, their active wallets have declined by 60%.
However, from a broader narrative of blockchain being used as a payment layer or for verification of digital assets, Solana stands out tall. The network is completing 4,600 transactions per second while Ethereum is processing 10.4 transactions per second with low costs. How SOL performs as an investment in 2023 is yet to have a definitive trend.
That’s it for this issue, see you next week.
If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.
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