SOL is one of the best tokens for long-term investment? Decoding the Multi-Engine Propulsion of Solana's Ecosystem

Original Title: Why SOL Remains One of Crypto's Best Long-Term Opportunities

Original Author: FLOW

Original Translation: Tim, PANews

Since the end of January, the cryptocurrency market has been in a downtrend, mainly due to macro uncertainty and weak sentiment. However, we have recently seen new upward momentum in the market. Although still in the early stages, various signs indicate that we may be at a turning point in cryptocurrency development. This trend has led me to have the idea of writing about the current state of the Solana ecosystem.

For me, Solana remains one of the strongest Layer 1 blockchains in the market. It is the fastest-growing ecosystem in the crypto space, one of the few public chains with a true natural growth advantage, and has even surpassed Ethereum in many on-chain metrics. Without further ado, let's get started.

Topics to be covered next:

· Network Status

· On-Chain Activity

· Ecosystem

· SOL Price Analysis

Solana Network Status

When starting the analysis, let's temporarily set aside price factors and focus on fundamentals. It should be noted here that Solana, as a blockchain network, seems to be in one of its strongest development phases ever.

Solana Network Stability

In its early stages, Solana faced criticism for network interruptions and instability issues. However, this seems to be a thing of the past. Since February 2024, the network has not experienced any interruptions.

The Lindy Effect is a powerful force in the crypto space, serving as a key metric for measuring trust and reliability. I believe this is precisely why Ethereum has gained favor from large institutions to date: since its mainnet launch in 2015, the network has always maintained a flawless uptime record. While Solana still lags in this aspect, its data performance is still encouraging. With increasing normal operational uptime, trust and reliability are also enhanced, which is crucial.

Level of Decentralization

Blockchain is guided by decentralization, a feature that distributes power and decision-making among its nodes, making the network more resilient. A simple indicator of decentralization is the Nakamoto Coefficient, where a higher value indicates a more decentralized system. According to the latest data from CoinTelegraph, Solana has shown outstanding performance with a Nakamoto Coefficient of 21.

Another key indicator of decentralization is client diversity. Having multiple validator clients can reduce the risk of single points of failure, which is crucial for the mature development of a blockchain. Currently, only Ethereum has achieved an ecosystem with multiple independent validator clients coexisting. At present, Solana has only one validator client provided by Solana Labs (although Jito Labs' version is fundamentally a fork and not an independent implementation). However, two independent clients are in development: Firedancer by Jump Crypto and Sig by Syndica. Once these clients are officially launched, they will significantly increase Solana's decentralization by moving away from reliance on a single codebase and introducing true client diversity.

SOL Staking Market Capitalization

Solana has recently surpassed Ethereum to become the blockchain with the highest staking market capitalization. On the surface, this indicates that Solana is currently in a leading position in terms of economic security. This value will become particularly important after the mainnet activates the slashing mechanism.

(P.S.: I understand that the topic of "economic security" is controversial and involves many simplifications, but for the sake of this discussion, I will consider staking market capitalization as a valid metric.)

Developer Activity

Developer activity is another important metric to observe. Ultimately, it is the level of developer activity that is shaping the future landscape of the blockchain. Electric Capital's latest report shows that Solana has become the top choice for new developers joining the ecosystem in 2024.

Lastly, equally important is the emergence of new initiatives aimed at improving Solana's performance at the communication layer (such as DoubleZero), which is another crucial vertical to closely monitor in the future.

On-Chain Activity

Since early 2024, on-chain activity has been consistently increasing, with numerous new projects emerging and the DeFi ecosystem showing vigorous development. This can be confirmed by various indicators.

Total Value Locked (TVL)

The TVL has been on a significant uptrend since the end of 2023, reaching a historical high of over $15 billion by early 2025. Although the TVL has slightly retraced since then, it has remained stable around $10 billion, demonstrating strong market resilience.

Stablecoin Market Cap

Solana has also seen a strong growth in stablecoin inflows over the past year. As of the time of writing, the stablecoin market cap on Solana has reached a record high of $13.2 billion. This clearly indicates the continued growth in network adoption and trust.

Transaction Fees

In terms of last year's total fee rankings, Solana ranks as the third-largest L1 blockchain in transaction fees, with a very small gap compared to Ethereum. This once again confirms the high on-chain activity of the network and strong market demand.

Ecosystem

The essence of blockchain is to provide the foundation for the development and prosperity of applications. Critics may argue that Solana's success is solely due to the frenzy around Pump.fun and meme coins, but I believe this view overlooks a more significant reason: Solana has the fastest-growing ecosystem in the entire crypto space, and its development momentum is increasingly driven by real-world use cases.

In fact, I would even argue that in the long run, the meme coin frenzy on the Solana blockchain has been more beneficial than harmful. This phenomenon acted as a carrot bait, allowing the Phantom wallet to successfully onboard millions of smartphones worldwide. This approach effectively addresses the "cold-start problem" that all emerging networks face, which is how to overcome the initial user base bottleneck.

With the existing user base successfully onboarded, Solana has a significant advantage to support more practical applications and continue to drive its growth trajectory.

The Maturing of DeFi

The DeFi ecosystem on Solana is maturing. As mentioned earlier, Solana has now become the second-largest Layer 1 blockchain by TVL and is one of the few that broke its all-time high TVL in 2025, continuing its growth trajectory from the previous cycle. This performance reflects both high user stickiness and its genuine market appeal.

In 2021, the first wave of DeFi on Solana was mainly experimental and driven by market hype. However, today, its growth appears more sustainable, with a stronger foundation and clearer market fit.

Protocols worth mentioning, in my opinion, include Jito, Kamino, Marinade, Radium, or Jupiter. To showcase Solana's pace of development, the team has shared some updates for May:

Furthermore, we are also witnessing the emergence of a new wave of DeFi primitives, with notable ones being:

· Real Yield Platforms such as: RateX, Exponent Finance, Sandglass, or Pye Finance

· Liquidity Recollateralization through Kyros

· Novel stablecoin infrastructure protocols in partnership with Perena, Global Dollar, or KAST Card

· Yield Aggregators like Lulo and Carrot

· Switchboard-based Oracle

There are many more examples of similar initiatives. Solana continues to attract existing protocols, with a recent example being 1inch, which just went live on the mainnet.

The Rise of DePIN

In addition to DeFi, we have also witnessed the rise of DePIN. According to Dune data, 46.5% of the total market value of DePIN is concentrated on the Solana blockchain, nurturing top projects like Helium, Hivemapper, and Render.

They have allocated over $4 billion to those involved in these projects, a significant amount.

Consumer Application Breakthrough

Although still in the early stages in the crypto space, there is a strong push trying to break into the consumer application arena. This is a challenging track that requires a lot of time and iteration to break through, but seeing talented individuals like Nikita Bier joining Solana as an advisor makes me optimistic.

Currently, crypto developers cannot find a more ideal platform than Solana. This blockchain network is attracting top talent and providing the most supportive initiatives: an active ecosystem fund, intensive hackathon activities, and a strong developer culture, where the vitality of startups truly thrives. Data also confirms this booming trend: according to blogger Qw Qiao's analysis, Solana is about to surpass other platforms for the first time, becoming the blockchain ecosystem with the most Alliance founders.

This leads me to believe that among many Layer 1 blockchains, Solana is most likely to become the birthplace of the first breakthrough crypto consumer application. If this scenario comes true, it will be a major boon for the network. Subsequent developments are worth close attention.

Strong Community

So far, we have explored many metrics and tangible elements used to evaluate networks. But what I want to emphasize is that Solana's greatest advantage is intangible: its community.

It is often said that communities that have experienced the darkest moments (such as the FTX collapse) will eventually rise from the ashes, becoming more resilient. I believe this is part of the story. Another key factor is the Superteam community, which excels in nurturing talent and maintaining development momentum, consistently injecting vitality into the ecosystem.

In my view, this is one of Solana's secrets to success, and it is fundamentally irreplicable. There is no other blockchain project in the crypto space that possesses this cultural heritage.

Institutional Onboarding

Institutional interest in blockchain networks is also rapidly growing. A recent example is BlackRock's BUIDL Fund expanding its operations to Solana after Ethereum. There are many similar cases, but I believe this is enough to make the point: traditional finance's confidence in on-chain infrastructure is continually strengthening.

In addition, Solana is likely to become the next cryptocurrency to receive approval for a spot ETF in the United States. According to the current prediction on the Polymarket platform, its approval probability for 2025 is 77%. The approval of an ETF would further legitimize SOL as an investable asset, solidifying Solana's market position as a highly trusted and credible network. This regulatory recognition is expected to open up new participation channels for institutional and retail investors, attracting more incremental funds into the Solana ecosystem.

SOL Price Analysis

From a price perspective, SOL experienced its first hype cycle between 2020 and 2021. However, like most emerging protocols at the time, its infrastructure was still inadequate, and the ecosystem had not yet matured. As the cryptocurrency market entered a bear market in 2022, this hype quickly dissipated. The impact of the FTX trading platform's rug pull further exacerbated the situation, leading many to believe that Solana was a "dead project."

Unlike most protocols that struggle to recover, Solana made a stronger comeback. After about a year and a half of consolidation, SOL broke out of its price range for the first time, initiating a new bull run. In fact, it became one of the few Layer 1 protocols to hit an all-time high since 2021, with a well-established and robust ecosystem supporting it this time.

The current situation is that after a nearly 67% crash from its all-time high in January, SOL has now rebounded strongly to around $170. While there may be some signs of overbought conditions in the short term, the mid- to long-term outlook is highly bullish.

Within the mainstream L1 space, SOL has also shown significant relative strength. The SOL/ETH exchange rate has formed a clear uptrend and is approaching its all-time high.

What's Next?

Of course, we cannot predict the future price direction. Instead, what we can do is establish a framework to better assess investment opportunities from a risk and reward perspective. One simple heuristic I like to use is to compare the fundamental changes of an asset from one point in time A to another point B with the price changes.

Currently, what I see is that you can now buy SOL at the same price as during the market frenzy in 2021. Back then, Solana was still just a dream, with no product-market fit, and the DeFi ecosystem was just getting started. Today, however, the future development prospects of this network are bright. It has become the fastest-growing blockchain in the cryptocurrency space, with real users, real-world use cases, and increasing institutional interest. Furthermore, I also believe that the market structure is evolving, in which the underlying network will continue to be the area where most of the market value accrues.

From this perspective, here is my take:

With more applications and projects continuing to be developed on the crypto network, along with a friendly regulatory environment and increasing adoption, the value of the crypto network will continue to rise. Ultimately, all global investors will want a piece of the pie in this space.

Aside from Bitcoin, I believe that Layer 1 blockchains will remain the core vehicles for value accumulation (they are the operating systems of the crypto world). Based on all the reasons we mentioned earlier, I believe that in the Layer 1 blockchain space, Solana is in a very advantageous position. Therefore, I believe that for those who have long been paying attention to cryptocurrency, SOL remains one of the excellent investment opportunities.

Finally, I will leave you with this sentence: Most people are still underestimating Solana, and perhaps that's a good thing.

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