VanEck anticipates that Solana’s value could increase by 10,000% with the addition of 100 million users.

Asset management company VanEck anticipates that Solana could witness a 10,000% increase in value by 2030 if the blockchain successfully attracts 100 million users, as detailed in a recent research report.

The most notable forecast from the report indicates that SOL could see a price surge of 10,600% by 2030, potentially reaching $3,211.28 per token. In comparison, Ethereum’s (ETH) target price for 2030 is projected at $11,800.

The cryptocurrency market is abuzz with activity as Solana’s native SOL token has risen above the $32 threshold this week, drawing interest from both investors and analysts.

100M users

VanEck’s analysis offers a variety of valuation scenarios for SOL by 2030, estimating prices that range from a pessimistic $9.81 to an optimistic $3,211.28, influenced by different market dynamics and revenue forecasts across essential sectors.

The report emphasizes a scenario where Solana becomes the first blockchain to support an application that can onboard over 100 million users.

In this scenario, VanEck posits that SOL monetizes at merely 20% of ETH’s take rate and captures less than half of the competitor’s market share due to differing community philosophies.

Despite these constraints, the asset management firm sees a plausible pathway for SOL token holders to generate an impressive $8 billion in revenues by 2030 if that level of adoption is achieved.

At present, SOL ranks among the top 10 cryptocurrencies by market capitalization, having experienced remarkable growth of over 200% since the beginning of 2023. The Solana ecosystem currently holds approximately $378 million in total value locked as of the latest update.

Killer app

Solana’s strategy for blockchain development focuses on usability — a vital element in determining the success of a blockchain in hosting the next “killer app.”

While the user bases of most blockchains remain relatively small compared to mainstream platforms like Facebook and PayPal, Solana seeks to close this gap by providing a more efficient and user-friendly experience.

To accomplish this, Solana has prioritized enhancing its data throughput capacity, exceeding that of any other existing blockchain and promising even greater improvements in the near future.

The report highlights that Solana’s data throughput capabilities lead to faster transaction processing, significantly outpacing Ethereum in terms of speed.

While Ethereum processes transactions at discrete intervals, Solana begins processing transactions immediately, resulting in turnaround times of around 2 seconds. This enhanced speed and efficiency are essential for attracting users to the platform.

The report also contrasts Solana’s philosophy with that of ETH.

Founded by engineers from Qualcomm, Solana focuses on making blockspace affordable and user-friendly, with a vision of fostering abundant technological advancement. In contrast, ETH has shifted its emphasis from providing inexpensive blockspace daily to securing consumer-facing blockchains with costly blockspace.

Challenges

Although Solana’s approach has led to significant technological progress, it has faced its share of challenges.

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

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

Furthermore, Solana’s pricing model, which relies on resource pricing and congestion, could present issues as more blockchains vie for specific use cases. The report suggests that if SOL prices decline, Solana’s ability to maintain its current status might hinge on a steady influx of speculative capital.

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

While Solana has made strides to address these issues, its intricate design and large data volumes complicate the prediction and resolution of future problems, potentially impacting its uptime and appeal to businesses.

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