R.O.H.A.S. valuation of Solana (SOL)

In my opinion, a fair valuation of SOL is US$ 1,047.

My valuation of Solana's native token SOL is based upon the following assumptions:

  1. The aggregate “economic impact” of public blockchains in 2022 will be US$ 1 trillion.

  2. Solana would be amongst the top 3 public blockchains by the end of 2022 and would provide 20% of the total economic impact.

Based on these 2 assumptions and considering a circulating supply of 292,840,369 SOL, a fair valuation of SOL is US$ 1,047.

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The detailed report is available here.

Note: I am not a financial adviser. You should consider seeking independent legal, financial, taxation, or other advice to check how the information relates to your unique circumstances. I am not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly.

1. Background

Solana is one of the world's cheapest and fastest public blockchains.

It has a block time of 400 milliseconds and transaction fees of less than $0.01.

Solana's native token is SOL. Fractional sols are called "lamports", and each lamport equals 0.0000000000582 SOL.

SOL can be:

  1. staked directly on the network

  2. delegated to validators in return for inflation rewards

  3. used to pay for fees for sending transactions

  4. used to pay for running smart contracts

Consensus mechanism:

Solana uses 2 consensus mechanisms - proof-of-history (PoH) and proof-of-stake (PoS).

PoH records successful operations and the time that has passed between them. PoS is used as a monitoring tool for the PoH processes, and it validates each sequence of blocks produced.

The Solana Foundation is a non-profit organization headquartered in Zug, Switzerland, dedicated to the decentralization, growth, and security of the Solana network.

Solana has a very vibrant ecosystem with more than 400 DeFi, NFTs, Web3 projects.

2. Valuation

My valuation of Solana's native token SOL is based upon the following assumptions:

  1. The aggregate “economic impact” of public blockchains in 2022 will be US$ 1 trillion.

  2. Solana would be amongst the top 3 public blockchains by the end of 2022 and would provide 20% of the total economic impact.

The detailed report is available here.

2.1 The base

The projected base for SOL is US$ 400 billion

This is how the base is calculated:

Base = Economic impact x Market share x Category

r1. Economic impact: US$ 1 trillion

r6. Market share: 20%

r5. Category: Fuel / Utility (2x)

2.2 The ROHAS grade / multiplier

The multiplier / ROHAS grade for SOL is 0.77.

This is how the multiplier / ROHAS grade is calculated:

Multiplier = [ r7 + r8 + r9 + r10 + r11 + r12 + r13 + r14+ r15 ] / 90

r7. Public information = 8/10

The grade of the publicly available project information on a scale of 1 to 10 where 10 signifies high-quality whitepaper, light-paper, explainer videos, website, social media posts, infographics, FAQs, etc.

r8. Team = 7/10

The grade of the team (founders, dev, business) on a scale of 1 to 10 where 10 signifies a highly-skilled, respected team with strong prior experience, strong credibility, and positive social media status.

r9. The ecosystem = 8/10

The grade of the ecosystem (miners, node operators, partners, startups building on the platform, etc.) on a scale of 1 to 10 where 10 signifies a strong, diverse, and decentralized ecosystem.

r10. Milestone achievements = 8/10

The grade of the history of the project on a scale of 1 to 10 where 10 signifies that all project milestones have been achieved on time.

r11. Performance history & liquidity = 8/10

The grade of the history & liquidity of the native crypto on a scale of 1 to 10 where 10 signifies strong growth in transaction volume, active users, trading volume, and adequate liquidity, availability of multiple trade pairs, & listing on multiple credible exchanges.

r12. Consensus mechanism = 9/10

The grade of the consensus mechanism on a scale of 1 to 10 where 10 signifies a proven, secure, and efficient mechanism with minimum environmental impact.

r13. Source code = 7/10

The grade of the source code, on a scale of 1 to 10, where 10 signifies exceptionally high-quality code. Factors to consider include third-party audits, pull requests, issues and their resolution, stars, quantity & quality of commits, forks, documentation, etc.

r14. Dev pool = 7/10

The grade of the future scalability of the developer pool on a scale of 1 to 10 where 10 signifies long-term availability of adequate developer talent. Factors to consider include the complexity of coding skills needed, the current availability of talent, availability of learning resources, ease of skill enhancement, etc.

r15. Community & Social engagement = 7/10

The grade of the social engagement level on a scale of 1 to 10 where 10 signifies a large, vibrant, active, engaged, positive community with a fair share of fanatics.

2.3 Value & Market cap projections

The projected Market Cap for SOL is US$ 307 billion (approx).

The projected value of SOL is US$ 1,047

This is how the Market Cap is calculated:

Market Cap = [ Base x Multiplier ]

This is how the value is calculated:

Value = Market Cap / Circulating supply

r2. Circulating supply: 292,840,369

r3. Maximum supply: Unlimited

r4. Total supply: 503,684,950