Solana at Over $3,000 by 2030? This Investment Analyst Thinks It’s Possible

 Key takeaways

• Solana (SOL) bull case projected to be north of $3,000 by the year 2030, according to investment analysts at VanEck
• VanEck shared their ‘Base, Bear, Bull Case’ for SOL, highlighting the blockchain’s in-built performance capacity as reason to be bullish and several major hurdles as reason to be bearish
• On balance, VanEck is positive about the future of Solana and clarified that the company itself has investment exposure following the launch of the Solana ETP

VanEck provides its base, bear and bull case for SOL by 2030

VanEck, an ETF and mutual fund management company based in the United States, recently released a fundamental analysis of Solana’s (SOL) price potential over the coming years. The ‘Base, Bear, Bull Case’ features an in-depth look into Solana’s unique value proposition within the world of Web3.

To summarize the content before getting into its reasoning, VanEck believes that SOL could hit $3,000 per token under the right circumstances. This projection represents the bull case for SOL, with the bear case being as low as $10.

The major discrepancy between the bull case and the bear case for SOL should come as little surprise. Blockchain-based cryptocurrencies are experimental technologies — while they certainly have major potential to disrupt the digital landscape, they also contain risks that are inherent in the process of discovery.

VanEck clarified that it has investment exposure to SOL. The financial analysts believe that Solana is one of the more promising blockchain networks due to its unique capacity to scale the decentralized web, stating that there is a “credible path” towards $8bn in revenue for Solana by 2030.

VanEck’s Base, Bear, Bull Case for Solana (SOL)

Solana could be the most efficient blockchain in Web3, but is demand the missing link?

VanEck highlighted Solana’s scalability potential as the underlying value proposition of the blockchain. The layer-1 network currently processes more data than any of its competitors and is soon releasing its Firedancer upgrade that will multiply this statistic by a factor of 10. VanEck believes that, after Firedancer is implemented, Solana will be far and away the most efficient blockchain in Web3.

Solana was specifically designed to meet the requirements of consumer-based dApps. It offers ultra-low transaction fees and rapid block confirmations, being able to process transactions in as little as 2 seconds for less than $0.01. Its main problem is that no dApps have so far been able to attract the level of demand that this kind of performance is able to support.

Solana outperforms other blockchains when measuring data throughput

Infrastructure projects such as digital asset exchanges and L1/L2 blockchains often support the highest number of on-chain users by far. dApps, however, rarely support more than 100,000 users at a time. Some notable exceptions to these conditions are the highest-rated GameFi titles — Axie Infinity and Splinterlands, for example, each attracted more than 1 million daily active users at their peak.

However, Axie Infinity and Splinterlands’ figures are still extremely low compared to the most-used web apps in the world. VanEck referenced “2bn monthly Facebook users and 431m monthly PayPal users” to show the gulf in demand between on-chain services and traditional web apps at this moment in time.

VanEck believes that this discrepancy highlights Solana’s long term potential. Solana has the unique capacity to support dApps that can truly scale to the same level as the most popular web apps in the world. VanEck therefore sees Solana’s scalability as a fundamental reason why it could be the blockchain that delivers global adoption.

However, the gap between Solana’s scalability potential and its current user base is seen as a major hurdle for the project to overcome. Solana suffers from operating losses due to the high costs of running its network infrastructure combined with low revenue generation from relatively few users and sub-cent transaction fees.

Unless Solana can successfully match its costly high-performance network with truly scaled demand, then it may struggle to ever turn a profit as an organization.

The cost of running Solana’s high performance blockchain is high, and the network operates at a loss due to its low transaction fees

Bottom line: VanEck’s Base, Bear, Bull Case highlights a key hurdle for Solana to overcome if it is to be successful long-term

The major discrepancy between VanEck’s bear case and bull case boils down to a gulf between the blockchain’s potential to support users and its actual usership rates in 2023. At this moment in time, Solana operates at a loss that is unsustainable over the long-term, and it therefore must match its highly scalable network with equally popular dApps if it’s ever going to achieve its potential.

That said, the blockchain industry’s rapid rate of adoption bodes well. The total number of people in the world who own cryptocurrency grew from 5 million to 295 million between 2016 and 2021, which averages to a +11,800% annual adoption rate. If Web3 continues its rapid rate of adoption, it is well on course to reaching 1 billion users before 2030.

Within this context, VanEck believes that Solana could be the first layer-1 network to support a dApp that serves 100 million users. If the blockchain successfully fulfills its value proposition, then the investment analysts believe that it could solve its revenue problem and hit its bull target of $3,211 by the year 2030.