Grayscale Bets On Solana’s On-Chain Growth – Is $260 Just The Start?

What Happened

Pump.fun, a memecoin launchpad and social app, attracts around 2 million monthly active users and generates approximately $1.2 million in daily revenue.

Helium, a decentralized physical infrastructure project focused on mobile hotspots, now provides services cheaper than centralized alternatives. The Solana-based protocol has 1.5 million daily users, 112,000 hotspots, and partnerships with major telecom companies like AT&T and Telefonica.

Additionally, a forthcoming upgrade called Alpenglow is expected to reduce finality time to 100–150 milliseconds.

Market Context

Crypto asset manager Grayscale says Solana’s steady on-chain growth could drive its native SOL token above $260, achieved during the 2021 bull market peak.

In its latest “Crypto’s Financial Bazaar” report, Grayscale argues that Solana leads the blockchain category in user count, transaction volume, and transaction fees.

Raydium, a decentralized exchange and core component of Solana’s DeFi infrastructure, has recorded over $1.2 trillion in volume, more than any other blockchain ecosystem. Jupiter, Solana’s leading DEX aggregator, is also the largest in the crypto industry by volume.

As a general-purpose blockchain, Solana ranks third in NFT trading, fifth in stablecoin transaction volume, and seventh in tokenized assets.

Solana uses local fee markets, which limit fee competition to specific high-demand applications, and median daily transaction fees this year have averaged just $0.001.

The number of Solana-focused developers has also grown faster than any other smart contract platform over the last two years, according to Electric Capital’s blockchain developer report.

Why It Matters

Grayscale: SOL Could Push Above $260 Despite $5 Billion Annual Fee Revenue

Industry Leaders Project SOL Could Push Past $260 to Hit $520 by Year-End

Details

“These aren’t the only considerations that matter, but on these core blockchain fundamentals, Solana stands apart from its peers,” Grayscale’s research team noted.

According to the report, Solana averages 4,587 users daily and processes up to 96,200 transactions per day, with the highest transactions per second among major blockchains, including Ethereum, BNB Chain, and Tron.

These examples represent just a fraction of Solana’s more than 500 unique applications.

Solana apps generate about $425 million in monthly fees, or over $5 billion annualized.

“We believe that fees are the most direct measure of total demand for a blockchain and its applications, and the data indicate there’s substantial demand for Solana,” Grayscale’s research stated.

Solana has carved out a competitive position by offering fast and cheap transactions.

The network produces new blocks every 400 milliseconds, and transactions reach finality in approximately 12–13 seconds. Transaction costs have remained low, with users paying an average fee of just $0.02 per year to date.

1,000+ Solana Developers Building What Ethereum Can’t Easily Copy

Despite crypto’s user experience challenges, Solana offers one of the best new-user experiences in the industry. Its fast and cheap transactions, diverse applications, and “monolithic” design eliminate the need to bridge assets between network components. Its wallet infrastructure, led by Phantom, also contributes to this advantage.

Solana uses a distinct architecture called the Solana Virtual Machine (SVM), unlike the Ethereum Virtual Machine (EVM) used by Ethereum, BNB Chain, Polygon, and Avalanche.

SVM-based applications can’t be easily transferred to non-SVM blockchains, potentially creating sticky demand.

More than 1,000 full-time developers work on Solana and SVM-based applications.

Given these metrics and the 7% staking reward for validators securing the network, Grayscale analysts believe SOL is currently undervalued at $202.36.