The demand for Solana is likely to keep increasing in the coming years.
Treasury companies continued to add Solana [SOL] to their holdings, a statement that would have seemed absurd 2-3 years ago.
AMBCrypto reported on continued whale accumulation and dwindling reserves of SOL on centralized exchanges. This factor could change, but overall, it shows that demand is still present even relatively late in the crypto cycle.
User momentum stays strong
Source: Token Terminal
Token Terminal data showed that the Daily Active Users, which had been averaging 100k in 2023, picked up the pace of its growth toward the end of the year. By November 2024, it had peaked at 6.4 million daily users.
With a respectable figure of 1.9 million users, it is highly possible that these numbers go higher during the next cycle.
Source: Solana Network Health Report
By contrast, network resilience remained steady.
The latest Solana Network Health Report listed a Nakamoto Coefficient of 20, which implied a decentralization level that compared well with other major chains.
The recent SIMD-0411 proposal would reduce to SOL inflation rate, but also reduce the staking yields. This could impact long-term investors, and most importantly, the passive income aspect that is essential to an early retirement.
So, how much Solana do you actually need to own today to retire in 2030?
The 2030 retirement plan for Solana holders
Passive income is one of the most important factors for hodlers looking to retire.
At its simplest, SOL native staking earns 5-7% APY. However, the reduced staking yields after the Solana proposal meant that this yield could fall to 2% APY.
Let’s assume one would need a passive income of $100,000 a year to retire.
Of course, this figure would vary vastly depending on the person’s needs and expectations, but a $100k figure seems reasonable for a U.S.-based hodler.
It is also assumed that these yields will constitute the yearly expenses, giving them little chance to compound.
Without accounting for tax and the inherently volatile nature of SOL, and using basic maths, we find that a total investment of $5 million is needed to yield $100,000 a year for a staking yield of 2% APY.
At $138.6 per SOL, that needs 36.2k SOL, a hefty investment indeed. With a 6% yield, the number would be a more modest 11.8k SOL.
Of course, since staking rewards are paid in SOL, it implicitly assumes the same price for SOL in 2030.
Source: SOL/USDT on TradingView
Technical analysis showed that a price target of $500 is achievable by the next crypto cycle. That would mean that a $5 million Solana investment now would yield $362.3k in 2030.
VanEck estimated a $3,211 SOL price tag in their bullish case for 2030. In this scenario, the same investment now would give a whopping $2.33 million in yield.
Or, in other words, if SOL does indeed reach $3,211 by 2030, you would only need to invest $214.8k in SOL now to earn $100,000 by 2030 and earn an early retirement (again, retirement amount varies widely).
Final Thoughts
- The rising Solana adoption and steady demand mean that a strong SOL valuation of $500 and as high as $3,000 is possible by 2030.
- The thought experiment is just that, a simple experiment with multiple assumptions. Investors must do their own research to find optimal strategies based on their requirements.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion