Making sense of Solana’s ‘extremely rapid’ growth
When Solana experienced a crash right after hitting a new all time high on 9 September, traders and experts tried to make sense of the event. On “The Best Business Show,” investment expert Anthony Pompliano interviewed Kyle Samani, co-founder and managing partner at Multicoin Capital, to discuss the rising star-turned-meteor, that Solana has turned out to be.
From 4 cents to over $200
Pompliano began by discussing Multicoin Capital’s investment in Solana. He calculated that the initial investment had gone up roughly 3750 times since the initial round, when one SOL had been at $0.04.
For his part, Samani said,
“Solana today is growing at an extremely rapid pace. Users being on-boarded, assets being issued, stablecoins going into it – all of these things. Look at the last nine days: it’s just a vertical line from, call it a billion in assets to like 10 billion.”
While listing out possible factors for Solana’s success, Samani cited Solana’s speed and network, its NFT platform Metaplex, the rise in SOL’s price, and the stablecoins issued.
Network > Price
Inevitably, Pompliano brought up Solana’s crash – though he admitted calling it so was “hilarious,” in the context of the alt coin’s growth. However, Samani’s answer was a surprising one. He claimed that he tried to ignore prices and didn’t refer to Coin Gecko or Coin Market Cap. Rather, he preferred to focus on Solana’s network and its growth. He further explained,
“Our time horizon is measured in years, not weeks or months. So the question we will always ask ourselves, is you know, is this network compounding at a sufficiently fast rate? And if you really go dig into developer activity, user on-boarding, dollar flow in the system. . .all of those things right now are compounding at an astounding rate and I don’t think that’s going to slow down.”
Furthermore, the following infographic presents data on Solana transfers.
We've prepared a fresh #infographic about the @Solana transfers ? As you can see, the tendency of higher inflows persists. It is twice as large as the total of assets transferred to other networks ↔️
How soon do you think we will cross the $300M milestone ❓ Let us know pic.twitter.com/SIZr0rX8Q7
— Allbridge (@Allbridge_io) September 16, 2021
Could Solana kill Ethereum?
Samani spoke about Metaplex and how the NFT platform came during the NFT Boom of summer 2021. He noted Ethereum’s high gas fees and how many users saw Solana as a faster alternative. Even so, Samani admitted that he thought it was “improbable” for Solana to displace Ethereum. Instead he suggested the two would likely co-exist.
Samani also addressed a common criticism aimed at Solana, regarding the its centralized nature, due to the number of validators and the expensive hardware required to run it.
When it comes down to it, most alt-coins are exactly like this. A small group of people can just shut down the network on a whim.
— Vijay Boyapati (@real_vijay) September 14, 2021
Samani called the criticism “valid” but “irrelevant,” pointing out that the trade-off meant better performance for users, reiterating the network’s rapid growth.
“I don’t think there’s going to be another Solana.”