SOL bull market peak at $247, market value of 75 billion;
Four years later, the market value is still 75 billion, but the price has fallen to only $134.
The same amount of money, the same market value, SOL has been impoverished by 50% due to its own coin issuance!
The culprit can be summed up in four words: bottomless inflation.
In 2021, the circulating supply of SOL was just over 300 million, now it has directly reached 560 million, nearly doubling! An annual inflation rate of 4.13% spits out new coins like a money printer, and no matter how high the staking, it cannot stop the explosion in supply. The money hasn't increased, but the coins have, it's strange if the price doesn't get cut in half.
In contrast, ETH, which was $3200 and a market value of 380 billion in 2022, is still at 380 billion and over $3100 today, almost completely unchanged. Why? The merge + EIP-1559 directly cut inflation to below 0.7%, and during peak periods, it could even deflate, with the supply increasing only 0.6% over four years, effectively locking in its scarcity.
As for SOL? It relies on an 8% starting point, with only a 15% annual reduction in “boiling frog” inflation, diluting early holders into chives. Now the community is finally getting anxious, the SIMD-0411 proposal aims to increase the reduction from 15% to 30%, wanting to crush inflation down to 1.5%. Will it succeed? It still needs to be voted on. But if nothing changes, SOL can be bullish for another four years, and the price will continue to be driven down by its own coin issuance.
In a nutshell:
ETH rises by burning coins, SOL self-harms by issuing coins.
Without addressing inflation, no matter how strong the bull market is, it will only hand over the reins to the air. $SOL
