Solana: Continuing the Supply Shock Narrative
On-chain analytics appear to show a supply shock could be taking shape for Solana, though one thing’s more important than watching network growth.
Another day, another Solana focused post. This isn’t because I personally own SOL, but because it’s at the top of my mind and the top of my research interests. That being said, as I was scrolling through Twitte today, I stumbled upon the infographic below.
This is a chart, corroborating the idea, which I mentioned earlier this week, that most of Solana’s supply is effectively illiquid(since it’s being staked). Since Staking Rewards, the original source for this information, gets their data directly from the networks they measure, they foot the bill of a trusted on-chain analytics provider in my mind. Put these numbers together with the fact that over the long-term, SOL has been on a tear, and it’s even easier to get behind the idea that a supply shock may be taking shape.
Interest in the Solana ecosystem is booming, driven mainly by NFTs and its’ technical differentiators, and yet, more and more coins appear to be being locked up. If this trend continues, it’s possible that we’ll see a Solana autumn, coupled together with the already trending #SolanaSummer, in the sense that the network will continue to grow, while also losing liquid supply.
Let’s pump the brakes here.
Remember my last post in which I cautioned against taking any of this as a price prediction? That still holds and will always hold. Growth doesn’t directly mean price growth and making price predictions is an inadvisable, shallow practice that misses what’s most important. The more adoption we get, the better it is for everyone involved in crypto. Supply shocks help that happen, both through attracting more risk-averse institutions to the space as well as through weeding out the weak from the strong supporters since they also include periods of precipitous decline.
Crypto moves in waves, and in my mind, that’s how it will be for years to come. Right now, the crypto market cap is just over $2 trillion, which is less than Apple’s alone.
It’s still early and for Solana supporters, it’s even earlier.
You’re still early to space.
Watch metrics that may indicate events like prolonged supply shocks but don’t let them slow you down from what’s most important. We need to keep building and make crypto, less crypto. Before you get up in arms about that statement, consider this.
How likely is it for the average person to use services like Metamask, Uniswap, and 1inch on a daily basis? People need to feel comfortable with the user interfaces involved to adopt new online services. This applies to crypto and anything else that’s online.
Until we can make our products be “crypto on the back-end,” but feel “normal” on the front-end, it’ll continue to be early, for Solana and everything else out there. Work is being done in this respect, but as I said, it’s early.
And that should excite you.
Looking Ahead: What’s Next?
With everything that I do, I aim to spark further, deeper conversations and simply help to educate the world about the power of this little, yet powerful place many of us have now called home for years. Now, I’m moving to an even shorter format for some of my work because, honestly, we live in an age where no one has time for anything.
For now, I’ll leave you with this question: what projects do you think are really working to bring Crypto/DeFi to mainstream audiences?
As always, feel free to reach out to me about your answer and more via Twitter or Discord@AriastheRaven#0117, and stay tuned for next time! Finally, most of my free time is now being taken up with my newsletter, which is completely free and focused on how the rise of the Metaverse improves things for everyone. Sub here.
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Disclaimer: I do not aim to garner any investment for the project from my efforts and no one should make any investment decisions based on what I write. All of my content is purely educational. Do not treat this post as an inducement to buy SOL(Solana’s native coin). In a day and age where you can never tell who isn’t just shilling their personal portfolios, this has to be said. Always do your own research before you put any financial resources on the line for anything.
