Multicoin Capital has been investing in Solana’s native asset, SOL, and the broader Solana ecosystem since Solana’s seed round in May 2018. We’ve previously published four theses about Solana, evolving our perspective as the network matured. Today, Solana stands as a $100B asset with the fastest-growing developer ecosystem, surpassing Ethereum in key on-chain metrics like trading volumes, daily active addresses, and DePIN payments.
This essay explores how Solana is positioned to power Internet Capital Markets, outperforming traditional finance (TradFi) giants like NYSE, NASDAQ, and Visa while reducing fees by 90–99% and capturing greater market value.
Key Advantages of Solana
Low-Cost, High-Speed Payments:
- Solana enables near-zero-fee transactions (~$0.001) with superior UX, challenging legacy systems like Visa ($1.4T market cap).
- Example: Sling Money showcases instant, affordable money movement.
Decentralized Finance (DeFi) Efficiency:
- Solana’s 400ms consensus (targeting 120ms) fosters tighter spreads via conditional liquidity (e.g., DFlow), reducing toxic order flow.
- Multiple Concurrent Leaders (MCL) will decentralize price discovery, enabling faster global trading.
Expanding Total Addressable Market (TAM):
- Horizontal Growth: Supports TradFi assets (equities, bonds) and crypto-native innovations (e.g., Parcl for real estate derivatives).
- Vertical Value Capture: Protocols like Drift, Jupiter, and Kamino offer composable financial services, generating MEV for Solana ($800M REV in Q4 2024).
Internet Capital Markets: The Vision
Solana aims to create a global, permissionless financial system with:
- Atomic composability.
- Transparent leverage.
- Maximum capital efficiency.
FAQ
Q1: How does Solana reduce fees compared to TradFi?
A: By eliminating intermediaries and leveraging blockchain efficiency, fees drop to fractions of a cent.
Q2: What is conditional liquidity?
A: Liquidity reserved for non-toxic order flow (e.g., retail trades), tightening spreads via platforms like DFlow.
Q3: Why is Solana’s TAM larger than NASDAQ’s?
A: It supports all asset types globally, 24/7, with open access for developers and users.
Q4: How does MEV benefit Solana?
A: MEV from DeFi activity accrues value to SOL, with protocols already generating $100M+ annually.
Solana is redefining finance—faster, cheaper, and more inclusive.