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What's the value of SOL if transactions are cheap?

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Summary

In this article, @mhonkasalo argues that Solana (a blockchain platform) is a viable asset and can capture value if it is successful in serving end-user applications at scale. The article outlines the mathematics of how Solana can become profitable and explains that the goal is to make transactions as cheap as possible. The article also explains the various parameters that Solana can use to increase profitability and provides an example of how it can make $20+ billion in profit per year. Finally, it encourages readers to become a free or paid subscriber to their publication to support their work.

Q&As

What is the goal of execution in the Solana network?
The goal of execution in the Solana network is to make it as cheap as possible.

What is the current inflation rate of Solana's token, SOL?
The current inflation rate of Solana's token, SOL, is 5.7%.

How much revenue does Solana need to become profitable?
Solana needs about a 40x increase in transactions at today’s fee levels to become profitable.

What type of fees does Solana use to capture value?
Solana uses base fees and priority fees to capture value.

How much revenue could Solana make if it is successful in serving end-user applications at scale?
Solana could make $20+ billion in profit per year if it is successful in serving end-user applications at scale.

AI Comments

👍 This article is incredibly informative and provides a great insight into the math behind Solana and how it could potentially generate a lot of revenue.

👎 The article is overly technical and complex, making it hard to understand for those not familiar with blockchain technology.

AI Discussion

Me: It's about the value of SOL and the math behind Solana's profitability and financials. Basically, it explains that if SOL is successful, it will be valuable. The article also explains how Solana can generate a lot of revenue if it achieves product-market fit.

Friend: That's really interesting. So, what are the implications of the article?

Me: Well, the article suggests that if Solana can achieve product-market fit, it can generate a lot of revenue. This is important because it means that investors can potentially make a lot of money from investing in SOL. It also means that Solana will be able to pay validators and token holders. Additionally, the article suggests that optimizing for low fees can help maximize the utility of the network and increase its value.

Action items

Research the Solana network and its potential applications.
Follow @mhonkasalo on Twitter and other social media platforms to stay up to date on the latest news and developments.
Consider becoming a free or paid subscriber to @mhonkasalo to support their work and receive new posts.

Technical terms

SOL: The native cryptocurrency of the Solana blockchain.
Investable: An asset that can be bought and sold in the financial markets.
Crypto Twitter/X: A term used to refer to the online community of cryptocurrency enthusiasts.
Rent-Seeking: A term used to describe the practice of attempting to gain economic rent by manipulating the social or political environment in which economic activities occur.
DAUs: An acronym for Daily Active Users.
TPS: An acronym for Transactions Per Second.
Firedancer: A scaling solution for the Solana blockchain.
Inflation Rate: The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
P/E Ratio: An acronym for Price-to-Earnings Ratio, which is a measure of the price paid for a stock relative to the annual net income earned by the firm per share.