Bonk price

Author: Nom Compiled by: Deep Tide TechFlow TL; DR -SOL's digital asset treasury (DAT) will be more efficient than ETH or BTC's DAT in accumulating current transaction supply. -The recently announced $2.5 billion SOL DAT, equivalent to $30 billion in financing for ETH or $91 billion in financing for BTC. -SOL in FTX's legacy is about to exit the market, but its narrative impact still needs to be further digested. -SOL's inflation problem remains a hindrance to price increases, which is about three times the size of the unlocked amount and needs to be addressed as soon as possible. Do you really want to read it in its entirety? So let's take a look at a few key points: I will not discuss the good or bad of inflation, because enough time has been spent on this, and I look forward to the changes that are coming. I'm a holder of spot SOL, staked SOL, and locked SOL (thanks to SPV on Estate SOL), so my opinion may be biased, I want my holdings to appreciate in value, and price stagnation is negative for me. Headwinds: FTX Legacy and Market Pressures Like many familiar blockchains, Solana sells tokens to investors through multiple funding rounds. A significant amount of these tokens went to FTX. According to @CoinDesk's @realDannyNelson, FTX held 41 million SOL at the time of its bankruptcy, most of which was sold through several funding rounds, with major buyers including Galaxy and Pantera at strike prices of around $64 and $102 (plus associated fees). At the current price of around $190 for SOL, these investments have already made significant profits. Through the analysis of staked accounts, "FTX Legacy SOL" currently has about 5 million units left to be unlocked, with a total value of about $1 billion. Why mention this? Recently, Galaxy and Pantera announced $1.25 billion and $1 billion in SOL DAT programs, respectively, plus $400 million from Sol Markets, for a total of approximately $2.5 billion (net of related fees). The problem is that this may not have a material impact on Solana's price, as SOL currently locked in the market can be purchased or distributed by these entities. According to @4shpool (gelato.sh), there are still about 21 million units of SOL to be unlocked until 2028, with a total value of approximately $4 billion. Rough calculations (more detailed model analysis can be provided by professional financial analysts) show that "FTX Legacy SOL" accounts for about a quarter of the remaining unlocks. On the other hand, Solana's inflation issues are also worth watching. Inflation is currently generally considered to be 7-8%, but the real inflation rate is about 4.5% of the circulating supply. This means that if the supply of about 608 million SOL in the 839th cycle is calculated, the supply will increase by about 27.5 million (inflation) and 10 million (unlocked) after one year, bringing the total circulating supply to about 645.5 million, with an inflation rate of about 6.2%. Again, this is just a verbal calculation on paper, I will let a more experienced analyst look at it and give you a more accurate chart. As can be seen from the sharp increase in circulating supply, "static" inflation is not accurate, it increases significantly at some points and is smaller at others. We have completed the remaining large unlock points. We need to focus on one key number: the number of SOLs entering the market every day. If someone gets a token for free (such as through staking inflation or unlocking) or at a discount (such as FTX Legacy SOL), it can be expected that a portion of it will be sold. I assume that 37.5 million SOL of inflation will be sold in full over the next year. If I want the price to go up, that's bad news for me – see point 2. So we need capital inflows, which can be achieved through DAT or ETFs such as $SSK (thanks to the @REXShares team for creating and submitting the BONK ETF, unabashedly recommended). Ideally, every dollar spent on buying SOL should enter the market, driving the price upward. However, this method is less efficient when it is possible to buy locked or discounted SOL. Therefore, we assume that greedy DAT actors will buy these tokens before unlocking them. Is that bad? Short answer: not bad. To offset the annual supply of 37.5 million SOL (assuming a price of $200 per SOL, idealized expectations), the market would need about $7.5 billion in inflows, or about $20.5 million per day (simplified here, not taking into account Monday-Friday trading days and bank holidays). If DAT is able to purchase tokens from FTX Legacy SOL or other locked SOL zones at a discounted price, this will increase the efficiency of inflows. For example, raising $400 million to buy SOL at a 5% discount equates to $420 million in inflows, which is clearly better than the $400 million injected directly into the market. The only question is how to assess the time value between buying SOL from the market today and reducing sales in the future. SOL inflation over the next three years will be higher than the amount unlocked (until the end of the lock-up program in 2028), and FTX Legacy SOL accounts for only a quarter of the remaining unlock. Therefore, DAT's prioritization of legacy SOL over SOL on the market does not have a significant impact on the overall market. Either Galaxy or Pantera can empty the remaining supply (assuming all legacy SOL is available for sale), and that's not counting existing DATs such as @defidevcorp, @solstrategies_, or @UpexiTreasury (as well as existing ETPs). Good news: trading supply vs circulating supply Money spent on SOL is more efficient than money spent on ETH or BTC for two main reasons. Trade supply First, the circulating supply does not equal the tradable supply in the market, especially for staked assets. Staked SOL cannot be purchased directly, but staked token derivatives (LSTs) can be purchased. According to the @solscanofficial team, Solana currently has 608 million SOL, of which 384 million SOL has been staked, accounting for 63.1%. LSTs account for 33.5 million SOL, so the actual tradable supply in the market is about 57.5% (about 350 million SOL is untradable with at least two days of delay). In comparison, ETH has a staking ratio of 29.6% and LSTs accounts for 11.9%. The higher supply in the market makes price fluctuations harder to achieve, while SOL's lower trading supply contributes to price increases. Relative capital efficiency Solana's market capitalization is much lower than that of ETH and BTC, with a circulating market cap of approximately $104 billion, compared to $540 billion for ETH and $2.19 trillion for BTC. Therefore, every dollar invested in SOL DAT is equivalent to 5 times the performance of ETH DAT and 22 times that of BTC DAT. When considering the staked supply, this efficiency increases to 11x and 36x, respectively. The benefit of these DATs is that they remove supply from the market, earn tokens through staking yield (already factored into inflation above), and make subsequent tools like ETFs more effective at driving the market. SSK has seen about $2 million in inflows per day since its launch, but the inflation plan requires 10x inflows – which could happen with more ETF approvals. Why read these? I've never signed up for Elon bucks, so it's a mystery to all of us. Summary: -SOL DAT will accumulate the current trading supply (rather than circulating supply) more efficiently than ETH or BTC DAT. Currently, less than 1% of the supply is managed by SOL DAT, which is expected to increase to 3% with the introduction of new initiatives, potentially reaching 5% in the future. -The recently announced $2.5 billion SOL DAT is equivalent to $30 billion in financing for ETH or $91 billion in financing for BTC. SOL DAT needed a leading figure like Michael Saylor or Tom Lee to drive the narrative. -SOL in FTX's legacy is about to exit the market, but its narrative impact still needs to be further digested. -SOL's inflation problem still needs to be solved, and its size is about three times the amount unlocked. -The current ETF inflow is insufficient, but with the approval of larger financial instruments, it is expected that SOL will be the focus of institutional attention starting in Q4 - Buy $BONK (not investment advice, please do your own research). - If you just want to get investment advice from posts like this, it is recommended that you find a more professional quantitative analyst to manage your assets