GM! Welcome to Milk Road PRO – your weekly crypto dive that’s sharper than a Solana price dip. 😬
Solana's price has dropped 35% since its peak in March.
Despite the dramatic price drop, we believe $SOL is poised for a major breakout.
Why? Because the fundamentals of Solana are continuously improving. 📈
The divergence between the price and fundamentals creates an incredible opportunity. Check out this chart which highlights our thesis.
The price is dropping while fees are not, and there are some key developments which make Solana even more promising.
Imagine this: You buy a software business. The numbers (users, revenue etc...) look great, and your software keeps improving, but the price of your company is dropping.
What do you do? 🤔
Actually hold on. Let's revisit all the numbers and key improvements ourselves before we answer that. We will share our answer at the end of this report. ⤵️
As investors, we should remain objective about our holdings and constantly challenge and revisit our investment thesis.
In today's edition, we will:
- 📊 Examine the onchain fundamentals on Solana
- 🚀 Identify the latest bullish developments on Solana
- 📉 Explore the price action of $SOL
- 🔮 Share where we think the price of $SOL goes next
By the end of this report, you'll know everything about the current state of Solana. So, get comfortable and let’s dive into the blockchain data first!
ONCHAIN METRICS 📊
When the price of an asset falls by 35%, the first thing we want to do is take a look at the fundamentals to see if anything has changed.
When analyzing a blockchain, certain metrics are crucial. Today we are going to look at these metrics:
- Blockchain fees
- Monthly Active Users Wallets (MAW)
- Trading Volume
- Stablecoins in circulation
If you don't know why each metric is important or how we should translate the data, don't worry.
Before diving into each one, we’ll explain why it’s important and what insights we're looking for.
1️⃣ Fees generated on Solana.
Blockchain fees are a key indicator of the blockchain's utility. Think of fees as the price for using onchain products.
When users are willing to pay transaction fees, it demonstrates that they find value in the products provided on that blockchain.
And that's the goal of every blockchain - provide as many useful products as possible so people come over and use the products.
Higher fees signal greater usage and demand, reflecting strong user engagement and adoption.
In short, the more fees generated, the better. So let's have a look at the fees on Solana overtime.
Since March 2024, Solana's fees have remained high – around $80 million/month. Even though the market has cooled down, the fees have not decreased. 🔥
But these numbers themselves are really hard to interpret without knowing how much fees are paid on other blockchains. So let's compare fees on other blockchains.
Solana began the year 2024 with $11 million in fees and last month generated about $50 million (excluding MEV), marking a 5x increase.
Compared to other major blockchains, Solana ranks fourth in fee generation, behind Ethereum, Tron, and Bitcoin.
❗This is a very positive sign for the Solana blockchain, indicating sustained user activity and engagement.
2️⃣ Monthly active wallets (MAW).
We look at this because we want to see that there are still some active users on the blockchain and ideally more new users are coming.
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
WHAT’S LEFT INSIDE? 👀
- Analysis of the latest bullish developments on Solana
- Where do we think the price of $SOL goes next
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