Solana (SOL) Overview 2022 – is it Still Relevant?

Solana has been getting a lot of bad publicity recently and rightfully so. Downtime has been significant over the past few months with several outages.

This isn’t to mention the infamous hack which claimed the funds of thousands of hot wallets including phantom and slope.

However, is there more to the story, and what does the future hold for this layer 1 blockchain? In this article, I will be answering these questions and more.

In this guide:

What is Solana?

Solana is a permissionless layer 1 blockchain that facilitates the development of smart contract platforms. It was founded in 2017 by ex-dropbox engineer Anatoly Yakovenko.

Solana Pros

Solana Cons

Metcalfe’s Law

The number one reason I am bullish on Solana is due to Metcalfe’s law. Put simply Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system”.

As shown by the image above, the average unique fee payers have grown from 51,890 in Q3’21 to 324,943 in Q2’22. When we look at the activity in the NFT sector is also impressive with 1.2m unique buyers in Q2 vs 1.6m for Ethereum.

Platforms such as Magic Eden continue to grow users and the likes of Okay Bears and DeGods prove to be strong brands within the ecosystem. Now considering we have been in a bear market this is certainly impressive. This makes you wonder, how will this perform in a bull market?


Although there is a high number of unique users at a level similar to Ethereum, this only tells half the story. If we look at defilamma rankings by total value locked (tvl), Ethereum is at $34.61 billion TVL while Solana is at a measly $1.47 billion. Therefore, if Solana is to bring more capital to its ecosystem it needs to focus on supporting DeFi protocols.


Solana’s native token is SOL and its primary use case is to process transactions, It is important to study the release schedule of this token to determine how much sell pressure can be expected. As shown by the chart above the majority of Solana’s tokens have been released. When compared to other layer 1 blockchains such as Near and Avalanche it has considerably fewer supply unlocks. Therefore, sell pressure is limited.

Network Performance

My final point and the elephant in the room is network performance. Outages continue to plague the network. Critics such as Justin Bons criticized the network and stated “an attacker could DDoS next stake holders inline & thereby gain control over the network”. Due to the low-fee nature of the blockchain, the network can be spammed.

However, as Thalita Franklin posed there are key updates coming to the network which will improve performance. Most importantly is Fee Markets. Users pay a tip with a transaction. The higher the tip the faster the transaction. Moreover, this update will reduce the load on the network by limiting duplications

The Future of Solana

The future for Solana certainly looks bright but there are many challenges to overcome. So now we get to the ultimate question. Do I think Solana is relevant for 2022 and beyond? Hell yes! although the outages, low TVL, and limited decentralization are a concern, I view them as growing pains. Same as Ethereum with high gas fees. But despite all these problems the users continue to come. NFTs are booming and Solana is attracting the brightest minds in the industry.

This leads me to my last point. As mentioned in bullish case for NFTs, markets of scale present a huge opportunity. At the time of writing Ethereum has a market cap of $188,502,305,919 while Solana’s is just $12,094,209,144. If if you want to learn more about Solana please read my article The Ultimate Guide to DeFi on Solana.