Solana has fewer chances to see its own all-time high once again if it doesn’t change a core structure of the project
The official account of Token terminal raises a significant issue for the Solana network, which could be the main reason for its slowdown, as SOL has lost more than 80% of its value since hitting its all-time high in November.
The “Ethereum killer” unfortunately, could not copy the best from its predecessor and did not change its fee structure under the rapidly developing market, which could have become one of the main reasons for Solana’s poor performance.
Apparently, Solana makes around $50,000 a day in fees, but spends $5 million a day on printing. The imbalance between network revenues and expenses is the main problem for the sustainability of the network’s economic model.
Solana’s issue with the business model is somehow similar to EOS and NEO, considered by the market as another “Ethereum killer” back in the 2017 bullrun. The issue with both networks was like the problems Solana is experiencing right now, including lack of proper fee structuring and technical issues.
Unlike the “Ethereum killers”, Ethereum itself is constantly modernizing its pricing structure and changing to conform to the rapidly developing market structure. The next update will bring a new consensus algorithm and maybe change the future of the network once and for all.
Solana is notorious for its constant downtimes, issues with transaction processing and other problems that push users away from utilizing decentralized apps on the blockchain and releasing their own solutions.
Solana, on paper, is still in its beta despite going through an entire bullrun cycle, with thousands more NFT collections and decentralized apps being developed and released.
