- Franklin Templeton views Solana as a rising crypto star, expected to rank just behind Bitcoin and Ethereum due to its resilience and growth.
- Solana’s low transaction fees and fast performance have spurred the emergence of numerous successful memecoins, boosting its market performance.
- Future trends on Solana include further airdrops, integration with DePIN technology, and enhancements from the Firedancer upgrade to address congestion issues.
One of the world’s largest investment managers, Franklin Templeton, is bullish on Solana, predicting it will be the third largest crypto just behind Bitcoin and Ethereum. In a recent note they highlighted the network’s resilience amid the collapse of FTX, which saw the price of SOL bottom at just under US$10 in early 2023.
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SOL has since outperformed much of the market in a remarkable rally, which focused heavily on memecoins. Due to its low fees and fast transactions Solana saw countless memecoins emerge, some like Bonk and dogwifhat reached billions of dollars in market caps.
But Franklin Templeton also believes that airdrops such as Jito and Pyth helped accelerate network growth in the fourth quarter of 2023.
Total fees and decentralised exchange (dex) volumes highlight the impressive growth as the below graph by Franklin Templeton shows.
As Solana’s network effects continue to grow the analysts at Franklin Templeton expect the trend to continue. They point to “some of the lowest fees, lowest transaction latency and highest data throughput relative to other networks”.
DePIN on Solana the Next Big Thing?
While Franklin Templeton admits they don’t have a crystal ball, they believe DePIN (decentralised physical infrastructure network) could be one of the biggest trends going forward and it’s likely to happen on Solana.
DePIN is a sophisticated integration of blockchain technology with physical infrastructure systems. It’s seen as a transformative approach to managing physical infrastructures, combining advanced technological solutions like blockchain and IoT with a focus on sustainability, efficiency, and enhanced governance through DAOs. It’s widely believed to be the next major trend in the sector.
Franklin Templeton believes other notable developments on Solana are payments, compression NFTs/xNFTs and CLOBs (centralised limit order books).
They also believe there will be more airdrops to come and memecoins – while holding no intrinsic value – will continue to, well, meme.
Firedancer Upgrade to Boost Performance, Fix Problems
The analysts also acknowledged issues around congestion. They believe this is mainly due to the network reaching its limit with the current design amid high demand, which developers continue to work on.
Notable is also the development of Firedancer, an upgrade to the Solana network. Firedancer, developed by Jump Crypto, is a validator client which is poised to bring significant upgrades to the network.
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It is hoped that it will increase client diversity and data throughput, and also fully utilise the validator hardware capacity.
All these factors considered, Franklin Templeton says there is only one spot for Solana: alongside Bitcoin and Ethereum at the top.
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