- Solana is one of the best performing cryptocurrencies on the market, even asides from categories like price.
- The crypto’s market cap increased by 17% in Q3-2023, and it ended the quarter with a market cap of $8.4 billion.
- Its revenue also increased by 10% to 185,400 $SOL and by 19% to almost $4 million in Q3-2023.
- Solana’s network activity declined in Q3-2023, but the average one-month retention rate was 17.9%. More people are HODLing
- Solana’s security and decentralization improved in Q3-2023, as shown by its Nakamoto coefficient of 29.
According to Messari, Solana is one of the best performing cryptocurrencies on the market, asides from categories like price.
According to a new quarterly report from the market-intelligence platform for Q3-2023 (July to September), Messari has highlighted Solana’s achievements, as well as its challenges and growth in aspects like price performance, network activity, security, and decentralization.
In this article, we will go over why SOL price is about to become parabolic, using Messari’s findings as a baseline.
Market Performance: SOL Maintains Its Top 10 Position
Solana had a rough 2022. Plain and simple.
After the initial crash from around $200 to a mere $40, the FTX crash brought SOL completely to its knees.
It was a bit hard to imagine how a cryptocurrency that used to trade at above $200 had now crashed to less than $10.
However, Solana is back in business.
According to Messari’s report, Solana ended the last three months (Q3-2023) with a market cap of about $8.4 billion.
This is pretty impressive, considering how this figure represents a whopping 17% increase from the previous quarter.
And at the end of the day, SOL beat several other cryptocurrencies, ranking seventh by market cap at the end of the quarter.
Messari also says that SOL experienced some price weakness during this interval, due to the ongoing war, the FUD from FTX liquidating its holdings etc.
However, SOL recovered quickly and reached a new all-time high of $28.6 on September 29.
Solana Revenue Spikes
Messari says that Solana also generated a massive amount of revenue (or fees collected) in Q3.
The report states that Solana’s revenue increased by 10% to 185,400 $SOL and by 19% to almost $4 million in Q3-2023.
Even better, half of these fees were burned to reduce inflation and further improve the cryptocurrency’s price.
The other half was redistributed to Solana’s sakeholders as “mining incentives”.
Messari found that Solana’s inflation rate was 5.8% at the end of Q3-2023. However, the report also says that this figure is expected to drop by 15% each epoch, until it reaches 1.5%.
The report also notes that 71.6% of the eligible SOL supply was staked in Q3-2023, and the annualized real yield rate for staking SOL was 1.1%, or 31% higher than the previous quarter.
Network Activity: Solana Remains Fast and Affordable
Solana’s network activity, measured by fee payers and non-vote transactions, declined in Q3-2023 and hit yearly lows (excluding the network outage on February 25, 2023) according to Messari.
The report says that this decline may be because of seasonal factors and reduced activity from some applications.
The average daily number of fees collected from the network’s usersdropped by 37% to 94,100, while the average daily number of non-vote transactions dropped by 25% to 24.7 million in Q3.
The report also says that the average daily number of new fee payers also decreased significantly by 76% to 11,400 in Q3-2023, mainly due to an unexplained anomaly in May.
However, Messari also says that the average one-month retention rate for Q3-2023 was 17.9%, which is consistent with the average rate from 2022 (excluding the May cohort).
This suggests that Solana has a loyal and engaged user base that continues to use its network.
Also, Solana’s transaction fees remained one of the most consistent and affordable in Q3, with an average non-vote transaction fee of $0.0002.
The report also shows that the number of non-vote transactions with priority fees decreased in Q3-2023.
Security and Decentralization: Solana Improves Its Resilience
Solana’s security and decentralization also improved in Q3-2023, as shown by several metrics.
The report reveals that the number of staked $SOL increased by 2% to 404.9 million in Q3-2023, which is almost back to the level before FTX’s collapse.
Solana is also ranked second behind Ethereum in terms of total staking market cap, with $8.2 billion at the end of Q3-2023.
Solana’s Nakamoto coefficient, which measures the minimum number of nodes needed to stop or break the network, decreased by 12% to 29 in Q3-2023.
However, this is still one of the highest among blockchain platforms, indicating that Solana is highly decentralized and resilient.
The report, in summary, concludes that Solana has had a strong Q3 despite some challenges.
Solana is also well-positioned to continue its growth and innovation in the blockchain space.
Solana’s community including its developers, users, validators, investors, and partners also remains strong, painting a highly bullish picture for this cryptocurrency in the next market cycle.
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