How Much Revenue Could Solanax Generate If We Became the Uniswap of Solana?
Hello SOLDiers, we hope you’re all doing well!
In a previous article, we analyzed if Solana could overtake Ethereum. As you probably are too, we’re quite optimistic about Solana. Solana’s success would mean a lot for Solanax.
Let’s dive right into it.
First, What Is Uniswap?
Now if you don’t know what Uniswap is, we’re just going to do a brief introduction.
Uniswap is a decentralized exchange that runs on the Ethereum blockchain and allows for decentralized token swaps. It works with the help of unicorns (as illustrated by their logo).
Traders can exchange Ethereum tokens on Uniswap without having to trust anyone with their funds. Meanwhile, anyone can lend their crypto to special reserves called liquidity pools. In exchange for providing money to these pools, they earn fees.
If you’re interested in more, you can check this article from Binance Academy.
From that brief description, we can see that the idea is pretty similar to that of Solanax, or vice versa, depending on how you want to look at it.
Indeed, we state something to that effect in our documentation:
- “The vision of SOLANAX is nothing less ambitious than becoming the UniSwap — a unicorn of the Solana network.”
Now, Uniswap got a lot of attention from the crypto news space last year because transaction fees made the platform a whopping $1B, much of which was distributed to liquidity providers.
That stat alone highlights the potential of Solanax. As the Solana ecosystem grows, Solanax could generate a lot of revenue if we become the largest DEX on the Solana blockchain.
What If Solanax Becomes the Uniswap of Solana
Estimates show around 4 million DeFi users on the Ethereum blockchain and that Uniswap is used by around 1.5 million people. Thus, Uniswap has a 37.5% share of Ethereum’s DeFi market — which is the largest.
Compared to that, co-founder Anatoly Yakovenko says that Solana currently has around 1.25 million total users, which is pretty impressive considering the blockchain is much younger than Ethereum. In 2021, Solana has grown more than Ethereum has: 95x vs 5x respectively.
Now, it’s hard to pin down how many Solana DeFi users there are. For our comparison, we’ll make it simpler and compare total value locked. This should provide a decent estimate of the market opportunity for Solanax.
According to DeFi Llama, the Ethereum blockchain has about $148 billion locked in DeFi protocols, while Solanax has almost $10 billion (as of mid-January 2022). So, let’s do some math:
- The Ethereum DeFi ecosystem is about 15x the size of Solana’s DeFi ecosystem.
- Thus, if Solanax gets the same market share as Uniswap, it should have 1/15 the revenue of Uniswap.
- Uniswap revenue is $1 Billion.
- Therefore, annual Solanax revenue has the potential to be 1/15 of $1 billion, or $66.67 Million (based on present numbers).
Important Note: This is just raw math with all the variables taken directly from Uniswap and Ethereum and applied indiscriminately to Solana and Solanax as they are today. This is NOT a financial projection, and it should NOT be taken as financial advice. It’s merely an exercise to educate the community about the market opportunity for Solanax.
As you can see, the market opportunity for Solanax is large. There’s a near $67 million opportunity out there.
This only paints half of the picture too.
The potential for Solanax to generate transaction fees as rewards for liquidity providers could be much larger. Remember, even though transaction fees on Solana are minuscule (which is only one of the many reasons we decided to develop our platform on Solana), this works in our favor because it incentivizes trades and transactions. Simply put, people are more likely to make transactions if fees are lower.
Moreover, we know all about the amazingly high transaction throughput of Solana in comparison to Ethereum. This is another reason why Solana has massive growth potential. We should see more users navigate to the Solana blockchain, which presents even more opportunities for Solanax to boost user numbers and revenue.
As you can see, the opportunity is $67 million and growing.
Clearly, if we can position ourselves as the Uniswap of this ecosystem, everyone will stand to benefit, from our users to our stakers.
Solanax is a Solana-based automated market maker (AMM) exchange providing lightning-fast trades, pooled liquidity, and other income-generating features. Solana was chosen as the underlying blockchain to facilitate low-cost, high-speed transactions. It is a permissionless, high-performance blockchain based on the Proof of History consensus (PoH).
Given the advantages that Solana offers when compared to other blockchain ecosystems, it is a popular solution among investors, users, and developers. Ethereum’s Proof of Work Consensus is slow, hard to scale, and comes with high gas fees which were exacerbated by its account-based system. Where Ethereum has failed to live up to the community expe, Solana quickly proves to be a viable alternative.
Solanax will utilize the cross-bridge Wormhole to connect to projects and digital assets existing on the Ethereum blockchain, facilitating adoption and allowing the crypto community to seamlessly move tokenized assets from one blockchain to another, improving interoperability and liquidity setup.
It is faster and cheaper; Solanax offers on-chain liquidity; traders will have more control over their trading activities; an integration of Wormhole for fusion with tokenized assets on the Ethereum blockchain, and much more.
For more details on the project at the forefront of the DeFi evolution, visit: