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.

mert | helius.xyz | 🔥 💃 @0xMert_

interesting responses notably: nothing fatal the network can't bounce back from or isn't already being worked on tells me that most CT sentiment has been due to pure panic due to price the stage is perfectly set for an epic comeback

mert | helius.xyz | 🔥 💃 @0xMert_

ok I'll bite — hit me with your absolute strongest steelman argument for why you don't think Solana will make it will compile all sides into a blog post and distill for everyone

Max Bronstein @max_bronstein

Think $SOL is one of the most asymmetric bets today Criticisms that were more true at the peak are comfortable to make down 95% + The root causes of its issues — alameda/sam — are gone and as Ethereum's roll-up vision accelerates, Solana will be the main monolithic challenger https://t.co/5WmbjQA5KI

Richard Galvin @richwgalvin

Responses to this actually pretty good @RockwellShah and @MikeIppolito_ 💪 Other factor, consider the "odds" - SOL now trading at 2.5% the value of ETH - in 2 yrs will know if mkt got that right or wrong but doesnt have to "kill" ETH or some other cringe narrative to stack up

DCinvestor.eth ⌐◨-◨ @iamDCinvestor

for people longing or adding SOL through the bear and planning to hold for 2+ years, what is your thesis and thoughts on unique value proposition? no "i'm contrarian because people don't like it" and/or "just hoping only for reflexive rebound because oversold" responses please

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.