Steady system growth, institutional investment and a healthy derivatives market are strong signals that SOL can still be a high contestant in 2022. 



Solana (SOL) has become a prime competition within the sensible contract trade and within the past year, the network's total worth locked (TVL) grew by $660 million and stretches across over forty localized applications to hit an uncomparable high higher than $11 billion. 

Even with this growth, investors have reason to question whether or not the present $56 billion market capitalisation is even and the way it compares to competitive networks like Binance sensible hain (BNB), Avalanche (AVAX) and polygon (MATIC). 

Avalanche, Solana, Binance Coin, and Polygon, priced in USD. Source: TradingView

By analyzing the past six-month worth performance, there is a noticeable decoupling from Terra (LUNA), Solana and Avalanche in comparison to different good contract platform competitors. 

There is strong institutional appetite for Solana's ecosystem

Solana's market capitalization is more than double that of Avalanche and Terra, every of that encompasses a $26 billion market cap. looking out Solana's latest news on Cointelegraph yields an exciting array of institutional investments, starting from the $314 million personal token sale by Solana Labs in June, to an $18 million raise in Sep by Solana's DEX project killer whale. 

There's solid proof of a growing scheme judgement by capitalist appetency. However, to grasp however booming Solana's scalability answer is, we've to evaluate its usage metrics. 

Looking at the amount of active addresses on Solana's DApps could be a sensible place to start out. 

Solana, Ethereum, Avalanche and Polygon 7-day most active dApps. Source: DappRadar

Ethereum's leading DApp by active addresses is Uniswap, that has 188,200. Therefore, Raydium’s 97,600 weekly users is rather impressive, considering it absolutely was launched simply ten months ago. Meanwhile, back in February. 2021, Uniswap already command over $4.3 billion TVL. 

As for Solana’s NFT marketplace Magic Eden, its 58,400 weekly active addresses additionally account for more than half of Ethereum’s OpenSea, the sector’s absolute market leader in volume and users activity. 

Avalanche user activity is extremely targeting the merchandiser Joe decentralised finance app, however its $715 million weekly volume pales compared to Uniswap’s $22.1 billion or Raydium’s $12.5 billion. the same may be said by polygon, that has $573 million in trading activity at its QuickSwap DEX. 

Solana has the third largest futures market

Solana presently holds the third largest futures open interest, that is that the most relevant metric in derivatives contracts. This indicator aggregates the overall variety of contracts held by market participants despite the recent trading activity. 

Solana futures aggregate open interest. Source: CoinGlass

Despite the sharp drop since the November. eight peak at $1.9 billion, the present $860 million futures open interest ranks Solana the third derivatives market by size. for example, Binance Coin (BNB) futures holds $520 million, followed by Terra (LUNA) with $430 million. 

Solana leads in TVL, users and derivatives markets

Undoubtedly, there is a powerful quantity of activity coming back from Solana's on-chain information and derivatives markets. The network’s TVL inflated by 15x over the past six months and Solana's DApps users is sort of 0.5 the number of users on the Ethereum network. 

Solana looks to be quickly closing the gap in 3 necessary metrics: TVL, active users and derivatives markets. Competitors like Terra, Avalanche and plane figure appear a protracted means behind, that probably justifies the market capitalisation premium. 

( Marcel Pechman, Cointelegraph, 2021)