Solana
Franklin Templeton Predicts Solana’s Rise to Third Ranking Cryptocurrency
- Franklin Templeton considers Solana a rising star in crypto, expected to rank just behind Bitcoin and Ethereum due to its resilience and growth.
- Solana’s low transaction fees and fast performance have spurred the emergence of many successful memecoins, thereby improving its market performance.
- Future trends on Solana include additional airdrops, DePIN technology integration, and improvements to the Firedancer upgrade to address congestion issues.
One of the world’s largest investment managers, Franklin Templeton, is bullish on Solana, predicting that it will be the third largest cryptocurrency just behind Bitcoin and Ethereum. In a recent note, they highlighted the network’s resilience in the face of the FTX collapse, which saw the price of SOL fall to just under $10 in early 2023.
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SOL has since outperformed much of the market in a remarkable rally, heavily focused on memecoins. Because of his low fees and fast transactions Solana has seen countless memecoins emerge, some like Bonk and dogwifhat reaching billions of dollars in market capitalization.
But Franklin Templeton also believes that airdrops such as Jito and Python helped accelerate network growth in the fourth quarter of 2023.
Total fees and decentralized exchange (dex) volumes highlight the impressive growth, as seen in the chart below from Franklin Templeton.
As Solana’s network effects continue to grow, Franklin Templeton analysts expect the trend to continue. They highlight “some of the lowest fees, lowest transaction latency, and highest data throughput compared to other networks.”
DePIN on Solana, the next big thing?
Although Franklin Templeton admits to not having a crystal ball, they believe that DePIN (decentralized physical infrastructure network) could be one of the biggest trends in the future and is likely to happen on Solana.
DePIN is a sophisticated integration of blockchain technology with physical infrastructure systems. It is seen as a transformative approach to physical infrastructure management, combining advanced technology solutions such as blockchain and IoT with a focus on sustainability, efficiency and improved governance via DAOs. This is largely the next big trend in the industry.
Franklin Templeton believes that other notable developments on Solana are payments, squeeze NFTs/xNFTs, and CLOBs (centralized limit order books).
They also believe that there will be more airdrops to come and that memecoins – although having no intrinsic value – will continue to be memes.
Upgrading Firedancer to Improve Performance and Fix Issues
Analysts also recognized congestion issues. They believe this is mainly because the network is reaching its limits with the current design amid high demand, which developers continue to work on.
Also worth noting is the development of Firedancer, an upgrade to the Solana network. Firedancer, developed by Jump Crypto, is a validator client that is poised to bring significant upgrades to the network.
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It is hoped that this will increase client diversity and data throughput, and also fully utilize the hardware capacity of the validator.
All these factors taken into account, Franklin Templeton says there is only one place for Solana: alongside Bitcoin and Ethereum at the top.