1 Top cryptocurrency that you can buy before it increases 1,850%, according to Vaneck

Solana (SOL 6.11%))) was introduced on March 24, 2020 with an initial coin offer of $ 0.22 per token. Today it is 164 US dollars -so an investment of $ 100 today would be worth around 75,000 US dollars. This profit of 74,900% was driven by the growth of its ecosystem for the development of decentralized financing apps (Defi) and non-fungal tokens (NFTS), its speed and scalability as well as the growing number of fintech and e-commerce partnerships from Solana Pay.

However, some investors expect Solanas price to increase even higher. Vaneck, who submitted the first US application for a fund (ETF) traded by Solana last year, expects its price to increase by another 1,850% to over $ 3,200 in his bull case scenario by 2030. Let us see why the investment company expects Solana to gather and whether investors should buy the token before it heats up again.

Why has Solana increased in the past five years?

How EthereumThe Solana blockchain uses a consensus mechanism (proof-of-stake) to validate its transactions. This approach consumes less energy than the mechanism of the proof-of-work that is used to dismantle BitcoinSince his tokens are only staked out (for interest -bearing rewards) instead of canceled. POS -Blockchains also support intelligent contracts with which decentralized applications (DAPPS) and other tokens are developed.

Many developers have started new tokens in Ethereum's blockchain, but Solana operates its own independent blockchain. It differs from its competitors by upgrading his own POS blockchain with a proprietary mechanism (proof-of-history) (POH), which helps him to process transactions with much faster speeds than the main blockchain from Ethereum.

Solana has a theoretical maximum speed of 65,000 transactions per second (TPS) compared to Ethereum theoretical top speed of 30 TPs for its layer 1 transactions. In the case of real transactions that are overloaded and other restrictions, Solana has a daily average speed of 1,436 TPS compared to Ethereum daily average speed of 19 TP.

This superior speed makes Solana a popular blockchain for the development of defi apps and non-fungal tokens (NFTS). At the beginning of 2022, his developers Solana Pay, an open peer-to-peer payment protocol, started with which dealers were able to accept stable coins, Solana and other tokens based in Solana at high speeds with almost zero-giving fees. visaPresent ShopifyAnd other companies subsequently integrated Solana into their digital wallets and e-commerce ecosystems.

The bull case for Solana

Vaneck's 2030 outlook for Solana contains a price target of $ 9.81 in its bear kub -sector -scenario and a target of USD 3,211.28 in its bull case scenario. In the “basic line estimate”, Solana will only be doubled to around 335 US dollars per token in the next five years.

His bull case is based on the expansion of the Solana Defi Ecosystem and increased user growth. According to Artemis Analytics, Solana only serves around 1.5 million daily active users (DUS), but Vaneck believes that his user base could expand to more than 100 million DUS because it accommodates more defibus, meta-verse, social, gaming and infrastructure applications.

Vaneck admits that reaching this explosive growth would be based on “Killer apps”, which Solana would finally transform into a mainstream platform for the processing of digital transactions. But it also warns that hosting of an application with more than 100 million users in its blockchain would “put their scalability to their limits”. Any overload would also reduce the speed of its transactions, but Solanas planned Firedancer upgrade this year could dispel some of these concerns.

Another potential catalyst could be the approvals of the first Solana ETFs. These lists could stabilize their price by attracting more retail and institutional investors. Returned interest rates could also attribute more investors to Solana and other cryptocurrencies.

The Bear Fall against Solana

Vaneck's bull housing for Solana is very speculative, but the bear case is easier. Solana is an inflation token without maximum care, so its value is always adhered to the growth of its developer ecosystem instead of its scarcity. It impresses its developers with the speed of its unique POH/POH mechanism, but still looks with a hard competition from the Layer 2-Rollups from Ethereum, which allows its transactions and processes them at a real world speed of 1,000 to 4,000 TPs. In contrast to Ethereum, Solana is not compatible with other blockchains, and his rust and C developer languages have a steeper learning curve than the solidity of Ethereum.

Even if a “killer” Defi -app finally arrives, it can start instead of Solana on Ethereum. All of these challenges could hold back Solana in the next five years.

Should you buy Solana?

Solana's proprietary mechanism, speed and low fees will remain more relevant than other blockchains for the foreseeable future. But it is just not as convincing as Bitcoin, which is rated by its scarcity or Ethereum, which remains the top developer blockchain. For now, I would hold on to these two cryptocurrencies with blue chip instead of setting too much trust in Vaneck's Bull Case scenario for Solana.