Editor's note: Recently, crypto KOL Little Bear Biscuits.eth published an article on the X platform saying that Solana may face major hidden dangers and that the price of SOL will be difficult to return to US$200. The article pointed out the continued quarterly losses exposed in Solana’s financial report and the unlimited issuance of SOL. This article caused many retail investors to FUD about SOL. Yesterday evening, crypto KOL Riyue Xiaochu refuted the views of Little Bear Biscuits.eth. He believed that SOL’s inflation was within a reasonable range and would not hinder the rise of currency prices, and the losses were only caused by denominated in US dollars. Data Illusion.
This article is for readers’ reference only and is not intended as investment advice, please DYOR.
bear biscuits.eth
Something big may happen to $SOL, and 90U is not the bottom, so don’t buy the bottom! ! ! Jump liquidated Solana’s token position when it plummeted yesterday. Does everyone know? The Solana chain, which is at its peak, has a bright future. Why would a high-frequency quantitative institution like Jump choose to clear its positions? ? ?
The liquidated $SOL tokens went into the wallets of you and me, Liaocai, and we gave the stablecoin to Jump with both hands. With such a low price, how long will it take not to buy the bottom? Who is the idiot? My little cookie tells you the shocking truth today: $SOL will never get back to 200. The information I base my judgment on comes from public data:
Solana suffered a huge loss of US$1.8 billion in the first half of the year alone, and its losses are accelerating
Solana has unlimited additional issuance, with 161 million additional issuances in three years, and institutions are cashing out
financial data
Solana lost money every quarter: from a loss of 160 million, a loss of 370 million, a loss of 840 million, to the second quarter of this year, a loss of 950 million in 3 months! The magnitude of this loss is still accelerating and cannot be stopped!
Has anyone told you these amazing statistics? Leeks, wake up and take over with caution!
Unlimited issuance
Since August 2023, $SOL has issued an additional 60 million tokens in supply. At the current price of $140 per coin, it is equivalent to selling $8.4 billion to the market, all of which we took over. In October 2021, the total supply of $SOL was only 301 million pieces, and three years later it was 462 million pieces. This is an annual increase of 15%. With such a high inflation rate, do you still dare to take over?
In the bull market of 2024, VCs are all laughing and counting their money and going on vacation. Only the leeks are still dreaming that SOL will return to $200. I hope my article can help everyone gain an independent, objective, calm and clear understanding. I wish you all the best to avoid pitfalls and make more money!
Data source:
Solana financial report released by Coin98 Analytics in July
Messari’s token issuance data
Sun and Moon Xiao Chu
Another erroneous analysis of data led to erroneous conclusions.
Many people are optimistic about $SOL, and this article has made people panic. So there are many people chatting about this issue privately. Then I will write some answers into articles.
First of all, I don’t mean to be disrespectful to the author of the original article. On the contrary, the KOL who is now willing to selflessly share high-quality KOL deserves everyone’s appreciation. The error in data analysis here is because the data dimensions themselves are very easy to misunderstand.
1. Let me talk about inflation first. The author of the article quoted Messari data and pointed out that $SOL issued 60 million additional coins last year, with a value of 8.4 billion thrown into the market. However, in fact, this newly increased circulation is not entirely an additional issuance of the $SOL network. First of all, what is written on the Messari screenshot is the new circulation. Secondly, in my red screenshot, you can see a step-like jump increase, and the additional issuance must increase at the same speed. Such an increase is impossible.
The new circulation includes not only the additional issuance of the network, but also the unlocked part. Since all $SOL organizations and teams have been unlocked, what is unlocked now should be the foundation or ecological funds. This part of the chips is often only unlocked, but will not be circulated, because the foundation cannot dispose of this part of $SOL at will.
What we focus on is inflation. In fact, the official documents have stated that now is the fifth year of Solana’s launch. The annual inflation is 3.5%, and the inflation will decrease by 15% every year. For comparison, the inflation rate of Ethereum in 2020 was 4.5%, and the market value of Ethereum at that time was between 20 and 70 billion US dollars.
So, inflation in $SOL is not that big of a problem. Historically, additional issuance will not have much impact on currency prices in rising markets, because many people will continue to hold the currency. Reasonable inflation will not hinder the rise of currency prices, and similarly, deflation cannot cause the rise of currency prices (such as ETH).
2. The second author of the original article proposed that $SOL suffered huge losses and expanded rapidly. It can be seen from the financial statements that it started losing 160 million, 370 million, and 840 million in the second quarter of 2023, and ended up losing 950 million in the second quarter of this year.
In fact, this is not an increase in losses. This is just a data illusion brought about by denominated in US dollars. In fact, nothing happened.
Because the expenses here include daily operations and $SOL paid to nodes (that is, the additional issuance of the network discussed in the previous section), and the latter accounts for the majority.
Let’s do a simple calculation. The average price of $SOL in the second quarter of 2023 is around US$25. Since the price in the fourth quarter has a large pullback, we will calculate it based on the average price of US$50. In the second quarter of this year, it is basically around 160 US dollars. Calculated in U.S. dollars. I roughly calculated that $SOL will be issued an additional 6 million coins every quarter. Simply multiply that by $150 million in the second quarter of 2023, $300 million in the fourth quarter, and $960 million in the second quarter of this year.
Of course, if you feel that the value of inflation in US dollars is constantly expanding, you can read the previous discussion on inflation.
Seeing this, everyone should understand that the financial statements seem to be experiencing huge losses that are expanding rapidly. This is just a data illusion caused by the rise in the price of $SOL. In fact, nothing happened, nothing happened, nothing happened.
Okay, let's play music and dance.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "Rhythm Blockbeats"
Original author: bear biscuit.eth, sun and moon Xiaochu
