A Forming View on Solana
Similarities I’m starting to see and exploring more of
Any seasoned crypto veteran knows that when prices fall drastically and confidence goes into a negative death spiral, your time to buy is slowly approaching. Across the crypto space we’re starting to see similar trends in all verticals which finally creates the right opportunities for long term investing. If you’re writing off crypto right now you’re probably going to lose out on some generational investment opportunities and chasing high valuations in the next bull market.
One clear parallel that me and many others are starting to see is Solana as the underdog of this cycle. I’m still uninvested so a lot of my writing is going to be me slowly forming a thesis and ya’ll can follow my thinking as I dive deeper into it. Therefore, this probably won’t be my last article on it.
Here’s a few tweets that have really resonated with my thinking on this topic recently.
If I was to summarise the main takeaways from these three threads I’d say that they come down to:
Solana is hated by many because it’s still associated with Sam/FTX and will be forever known as Sam-chain
L2s will dominate the landscape for the foreseeable future and there’s no need for another monolithic chain
The network continuously goes down and the technical problems Solana faces can never be fixed
My favourite L1/L2 will be the only chain which apps will build on and any non-EVM chain has no change of being successful
Solana only has low float tokens meant to fleece retail and the VCs are low quality
Everyone in the ecosystem are scammers or opportunists that will leave once there’s no easy money left on the table
All of these look like valid points on the surface but I don’t think a lot of them hold up against more solid scrutiny. I want to take the time to carefully understand each of these points before making any brash conclusions so I’ll leave it to another post.
However, I know that I can now reframe my thinking process as follows:
Solana is at a $3.6B FDV, down from close to $100B just over a year ago
There are some potentially valid reasons as to why you shouldn’t get involved, however they don’t seem like anything potentially game-wrecking
Prove/disprove any of the criticisms to accurately gauge the risks and assign rough metrics for how real/unreal the risks could be
Once you’ve bounded the risks, you then make an evaluation for how valuable you think block space will be in the future
Provided the market doesn’t have any potential up catalysts for the next few months, should valuations slide another 50%-75% you have a once in a lifetime buying opportunity
In the bull market I couldn’t engage my mental curiosity towards investing because the entire market was over-valued trash with terrible risk/reward ratios. However, that’s changing rapidly and you should be ready to act when the time is right.
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