Solana recently took another step ahead of Ethereum, this time, in terms of economic value. When the network first made its debut, it was marketed as an Ethereum killer, making clear its aim to be better than its rival.
According to a recent Blockworks analysis, Solana’s real economic value recently soared to a record high of $11.08 million. But what does that mean for the network? The real economic value metric takes into account the minimum viable ecosystem (ease of developing dapps) and the network’s transaction fees.
Analysis reveals that Solana achieved parabolic growth in its real economic value and even outpaced Ethereum earlier this month. In other words, Solana became a more attractive network for developers to build on than Ethereum.
Surging Solana Fees Underscore Expanding Utility
Solana’s win suggests that the network should be enjoying higher levels of utility and development. The level of developer activity and fees generated by the network are ideal metrics for establishing network adoption from a development perspective.
Solana fees have undoubtedly exploded this year, especially in the first half of 2024. Network fees hit a daily high of $4.95 million on 18 March, but have since declined to as low as $272,660 on 7 September.
Solana network fees embarked on a supercharged recovery since then, going as high as $4.7 million in the last 24 hours at press time. This was confirmation that dapps have been enjoying renewed activity as the bullish sentiment made a comeback over the last few weeks.
Developer activity also dipped during the first half of the month. However, significant recovery in developer commits was observed recently. For context, Solana registered 270 commits in May 2024 and this was the month with the lowest developer activity in the last 5 years.
October was not yet over at the time of writing but the number of commits had already surged to 479. This was the first time that Solana registered more than 400 commits in the last 6 months.
SOL Bears Ready to Take Over after Recent Resistance Retest
Solana’s native cryptocurrency SOL has been trading in a bullish flag pattern and it recently retested the upper declining resistance line. It recently peaked at $179, courtesy of a strong bullish performance this month, building on its September momentum.
The resistance retest yielded some sell pressure, pushing price down to $173 at the time of writing. This was equivalent to a 3.17% drop from the previous day’s high, indicating a potential take-over by the bears.
That outcome was further supported by the fact that price was overbought at its recent local high. Will SOL price experience a deep retracement? Based on the resistance retest and historic performance, we may witness a substantial pullback.
However, the possibility of a bullish breakout was noteworthy considering the latest surge in SOL demand from the buzzing Solana ecosystem. Another possibility is that the prevailing demand may limit SOL’s potential downside. This is assuming that on-chain demand for the cryptocurrency will remain high.
