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If Solana does not change a basic structure of the project, it will have fewer chances to reach its previous all-time high. Token Terminal’s official account raises a critical issue for the Solana network, which could be the main reason for the network’s decline, since SOL has lost almost 80% of its value from it’s all-time high in November.
- Unfortunately, the Ethereum killer failed to learn from its predecessor and did not adjust its fee structure in response to the quickly changing market, which could have been one of the key reasons for Solana’s dismal success.
- According to reports, Solana earns $50,000 per day in fees but spends $5 million per day on printing. The fundamental concern with the network’s business model’s longevity is the imbalance between revenue and spending.
- Solana’s problem with the business model is reminiscent of EOS and NEO, which were dubbed another Ethereum killer by the market during the 2017 bull run. Both networks had concerns similar to those that Solana is having right now, such as a lack of suitable fee structuring and technical issues.
- Unlike Ethereum killers, Ethereum is continually updating and modifying its fee structure to keep up with the fast changing market structure. The forthcoming update will introduce a new consensus method, which could permanently alter the network’s destiny.
- Solana is known for its frequent outages, transaction processing troubles, and other challenges that discourage users from using decentralized apps on the blockchain and publishing their own solutions.
Despite going through a full bull run cycle and dozens of NFT collections and decentralized applications being developed and published on top of it, Solana is still in beta.
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Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
