1. SOL’s price has surged by over 470%, but TVL has not increased significantly.
If SOL’s price reflects investor sentiment, then Total Value Locked (TVL) in Solana’s ecosystem provides data on its utility.
According to data from DeFiLlama, Solana’s TVL is currently around $400 million, doubling from the $200 million at the beginning of the year. However, this figure is still far from the multi-billion-dollar levels seen during the 2021 uptrend.
The recent price increase in SOL is a sign of investor sentiment, but the demand for SOL applications is crucial for sustaining price growth. Therefore, predictions of SOL reaching its previous all-time high (ATH) are closely linked to TVL returning to ATH levels.
With the current data, SOL’s DeFi applications still have limitations and have not fully recovered. Although the SOL network has shown more stability and fewer interruptions than before.
2. Solana (SOL) has no maximum supply.
When deciding to hold an Altcoin for the long term, one of the first pieces of information that any holder wants to know is the total supply. The total supply helps determine the project’s relative valuation and scarcity compared to demand.
Solana (SOL) is an interesting case regarding its total supply. SOL has no maximum total supply; theoretically, it has an infinite supply. However, in practice, the total supply will change to ensure controlled inflation as originally planned.
According to CoinMarketCap data, SOL’s current total supply is 560 million SOL, with approximately 420 million SOL circulating in the market. However, this 560 million figure is not fixed; it’s just one phase in the growth of the supply, as shown in the project’s chart.
The project states that initial inflation is 8%, decreasing to 15%, and the long-term inflation target is 1.5%. This is achieved through adjustments in Staking Yields and the total supply.
This requires SOL holders to trust the project’s mint/burn plan and activities.
3. Many investment funds in the Crypto market are holding SOL.
According to CoinShares’ fund flow report, SOL ranks just behind BTC and is even chosen over ETH by some investors. Solana is the Altcoin receiving the largest net inflows into portfolios across various timeframes, from weeks to months and years.
Additionally, SOL is an essential part of Grayscale’s portfolio.
SOL’s recent surge has received a further boost from VanEck’s extremely bullish prediction, suggesting SOL’s price could reach four digits, exceeding $3,000. Recent selling pressure on SOL due to FTX asset liquidation may not be a significant concern with daily trading volumes of over $2.5 billion.
While SOL holders may feel they are “swimming with the whales,” not knowing when to exit could lead them to “buying at the peak” if large players decide to take profits.