Solana (SOL) currently accounts for 15% of the smart contract platform (SCP) market capitalization, with projections indicating a rise to 22% by the end of 2025, which could push SOL’s price to $520, according to a recent report by VanEck.
Solana’s market cap expansion is driven by its strong developer presence, increasing share of decentralized exchange (DEX) volumes, rising revenue, and growing active user base.
VanEck’s valuation model ties Solana’s expected SCP market share to the U.S. M2 money supply growth, which has historically correlated with crypto market capitalization. Cash, short-term deposits and checking deposit are included in M2, which is used as an overall measure of money supply across the US, eurozone, and UK.
It is estimated that the M2 money supply will be $22.3 trillion at the end 2025. This growth has been maintained by a rate of annualized 3.2% since October 20, 2023.
According to regression analysis, the total SCP capitalization is expected to grow by 43% in 2025 and surpass its peak value of $989 Billion.
Using an autoregressive (AR) model, VanEck estimated that Solana’s market capitalization could reach approximately $250 billion. SOL’s price would be $520 if there were 486 million tokens in circulation.
Scaling up revenue
Solana, a layer-1 blockchain that has just been launched in January 2024, is leading the pack when it comes to DEX (45% of market share), revenue from chains (45%), as well as daily wallet activity (33%).
VanEck project that If the trend is maintained, Solana could expect to reach a revenue of 6 billion dollars per year. The network’s revenue comes from three primary sources: base fees, priority fees, and maximal extractable value (MEV).
Base fees, which represent minimum costs for network use, accounted for 1% of Solana’s revenue in January. Meanwhile, the priority fees are tips users pay for faster transaction inclusion, totaling 43% of the network’s revenue.
MEV represented most of Solana’s revenue last month, as 56% was secured through fees earned by block builders optimizing transaction execution.
The MEV Booster
Solana’s MEV revenue structure allows block builders to capture 60% of MEV value, with validators retaining 40%. If validators were to capture 80% of MEV, mirroring Ethereum’s structure, MEV-derived revenue could increase from $3.4 billion to $6.8 billion, a 56% rise in SOL’s validator revenue.
The report highlighted that improvements to Solana’s Jito system, protocol enhancements, and the implementation of Firedancer could further facilitate the growth.
Due to its private memory pools, and the insider advantage, Solana’s MEV capture in its present state is less efficient.
Approximately 92% of validators use Jito’s MEV auction software, yet many also engage in private mempools, giving some traders a competitive edge. Addressing this issue could enhance Solana’s MEV revenue capture.
This report included solutions such as validator whitelists for preventing collusion, MEV application protections that reduce front-running and RFQ systems (Request-for Quote) to improve pricing transparency in DEXs.
A multi-leaders model that allows multiple validators simultaneously to suggest blocks would also reduce the influence of dominant block builders.
Dapp growth
Solana’s application ecosystem has expanded, overtaking Ethereum in decentralized application revenue. Ethereum’s dapps generated 84 percent of revenue in 2022. Solana made up 0.26%. By 2024, Ethereum’s share fell to 32%, while Solana’s rose to 42%.
Solana’s dapp revenue surged from $4 million in 2022 to $1.25 billion in 2024. The network has also become a primary destination for developers, adding 7,625 new developers in 2024, compared to Ethereum’s 6,456.
If MEV optimizations are successfully implemented, Solana’s validator revenue could increase significantly, supporting greater demand for SOL and positioning its price over $500 by the end of the year.
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