Solana (SOL) surpassed Ethereum (ETH) in Real Economic Value (REV) as both chains achieved new revenue all-time highs this Monday. With that, market participants speculate and predict SOL’s price potential for what could be “the biggest crypto bull run ever.”
Real Economic Value is an important fundamental analysis metric that gives insights into a blockchain’s demand and use. It is arguably a better metric than active addresses, as it is more expensive to manipulate but still requires caution.
On November 11, Solana and Ethereum reached a daily revenue ATH of $12.1 million and $11.2 million, respectively. Weekly, the networks made a total of $48.7 million and $39.0 million, respectively, consolidating the third consecutive week of Solana generating more revenue than Ethereum – as Dan Smith, Blockworks Research analyst, reported.
Solana: Real Economic Value (Transaction Fees + MEV Tips). Source: Blockworks Research / Dan Smith
Essentially, Blockworks Research calculates REV by summing up the total network fees with the Maximum Extractable Value (MEV) tips. This means that Solana users have been generating more economic value for its validators despite Ethereum having more market capitalization.
Fundamental analysis using REV plus market cap
On that note, analyzing REV and other fundamental metrics could help investors and traders build price prediction models. These indicators can be used as a benchmark for comparing different chains, forecasting potential growth, and spotting value asymmetries.
In particular, Santiago R Santos, founder of Inversion Capital and Ethereum’s CryptoPunk #9159 owner, commented on the matter this Tuesday. Santos questioned the market capitalization asymmetry between ETH and SOL, with the latter having less than one-third of the former.
“Solana is 30% of Ethereum’s market cap and I can’t think of a compelling reason why it shouldn’t be worth at least 100%.”
– Santiago R Santos
Solana (SOL) price prediction
According to the investor, Solana’s fair value would be the same as Ethereum, at approximately $385 billion.
This would mean a price of $815 per token, considering the current circulating supply of 472 million SOL. If using Solana’s fully diluted value, having Ethereum’s market cap would mean a price of $653 per SOL.
As of this writing, Solana is trading at $207.60, up 104% year-to-date. Therefore, a rally to these potential prices would mean gains in a range between 214% and 292%.
Solana (SOL) year-to-date price chart. Source: Finbold
However, there is no guarantee that Solana will ever reach the same capitalization of Ethereum currently has. Moreover, Ethereum’s market cap itself will change overtime, requiring the analysis to adapt as things develop.
In the meantime, Solana has gained the spotlight after surpassing BNB Chain (BNB) to become the fourth most valuable cryptocurrency. Smart money traders have also shown optimism about Ethereum, buying over $34 million of ETH, as Finbold reported yesterday.
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