VanEck believes Solana can grow 10,000% in value if it onboards 100M users

Asset management firm VanEck believes Solana could see a 10,000% growth in value by 2030 if the blockchain attracts 100 million users, according to a new research report.

The most striking prediction from the report suggests that SOL could experience a 10,600% price rally by the year 2030, potentially reaching $3,211.28 per token. Comparatively, Ethereum’s (ETH) 2030 target price is set at $11,800.

The cryptocurrency market is buzzing with excitement as Solana’s native SOL token has surged above the $32 mark this week, capturing the attention of both investors and experts.

100M users

VanEck’s research presents a wide range of valuation scenarios for SOL by the year 2030, projecting prices that span from a bearish $9.81 to a bullish $3,211.28 based on projections influenced by various market factors and revenue estimates across key sectors.

The report highlights a scenario in which Solana becomes the first blockchain to host an application capable of onboarding over 100 million users.

Under the scenario, VanEck assumes that SOL monetizes at only 20% of ETH’s take rate and attains less than half of the rival’s market share due to differing community philosophies.

Despite these limitations, the asset manager believes there is a credible path for SOL token holders to generate a staggering $8 billion in revenues by 2030 if it hits that level of adoption.

Currently, SOL stands tall as one of the top 10 cryptocurrencies by market capitalization, having recorded impressive growth of over 200% since the start of 2023. The Solana ecosystem has roughly $378 million in total value locked as of press time.

Killer app

Solana’s approach to blockchain development centers on usability — a critical factor in determining the success of a blockchain in hosting the next “killer app.”

While the user base of most blockchains remains relatively small compared to mainstream platforms like Facebook and PayPal, Solana aims to bridge this gap by offering a more efficient and user-friendly experience.

To achieve this, Solana has focused on enhancing its data throughput capacity, surpassing any other existing blockchain and promising even more significant improvements in the near future.

The report points out that Solana’s data throughput capabilities translate into quicker transaction processing, significantly outperforming Ethereum in terms of speed.

While Ethereum’s transaction processing occurs at discrete intervals, Solana starts processing transactions instantly, resulting in turnaround times of approximately 2 seconds. This superior speed and efficiency are crucial for attracting users to the platform.

The report also draws a stark contrast between Solana’s philosophy and that of ETH.

Solana, founded by Qualcomm engineers, emphasizes making blockspace inexpensive and user-friendly, with a vision of promoting abundant technological progress. Comparatively, ETH has shifted its focus from selling cheap blockspace daily to securing consumer-facing blockchains with expensive blockspace.

Challenges

While Solana’s approach has led to impressive technological advancements, it has not been without its challenges.

The report noted that while Solana generates revenue from transaction fees, it also incurs significant costs to secure its blockchain through SOL inflation payments to validators.

In the short term, Solana’s profitability may not be a concern, but ensuring organic SOL demand to cover security costs remains a long-term challenge.

Moreover, Solana’s pricing model, which depends on resource pricing and congestion, could be problematic as more blockchains compete for specific use cases. The report suggests that if SOL prices weaken, Solana’s ability to sustain its current state might depend on the continuous influx of speculative capital.

Additionally, the report highlights Solana’s technical stability issues, citing unpredictable downtimes in the past due to the experimental nature of the system.

While Solana has made improvements to mitigate these issues, its complex design and colossal data volumes make it difficult to predict and resolve future complications, potentially affecting its uptime and attractiveness to businesses.