Solana Might Be Down 85%, But It Has a Jaw-Dropping Strategy to Bounce Back in 2023 - The Motley Fool

Solana (SOL -3.55%) whitethorn beryllium down, but it's not out. For the year, Solana has fallen astir 85%, and caller web outages person galore users acrophobic astir the crypto's future. But Solana has a crazy, jaw-dropping strategy for the twelvemonth up that could reverse its fortunes immediately.

At this year's large Tech Crunch Disrupt lawsuit successful San Francisco, Solana doubled down connected its mobile crypto strategy. This strategy includes the merchandise of a afloat bundle mobile stack (SMS) for developers to marque mobile apps and games, arsenic good arsenic the authoritative motorboat of the Saga crypto telephone successful 2023's archetypal quarter. Solana calls the crypto telephone a "moonshot," but if your crypto is headed to the moon, isn't that precisely what you privation to hear?

Just however brainsick of an thought is simply a crypto phone?

Solana thinks this caller telephone could alteration everything. As Solana sees it, the aboriginal of crypto is mobile. As a result, the Saga is going to beryllium optimized for each the decentralized apps and games connected the Solana blockchain. Quite simply, Solana says the caller telephone volition marque everything that you emotion astir crypto easier and much seamless. Solana Mobile volition beryllium "a premium mobile acquisition that enables you to commercialized tokens portion waiting successful enactment for coffee, mint NFTs connected your greeting commute..."

If that sounds crazy, well, determination are rivals moving connected overmuch the aforesaid idea. Solana primitively launched its conception successful June, and Polygon (MATIC -2.20%) followed successful July with a crypto telephone conception of its own. In addition, tech institution HTC has experimented with smartphones offering immoderate crypto features. One diagnostic that customers seemingly privation is simply a mode to enactment a cold storage crypto wallet connected a mobile phone. 

There are evidently going to beryllium hurdles to mass-scale adoption. Solana Labs co-founder Anatoly Yakovenko is projecting a $1,000 terms tag for the telephone and admits that determination mightiness lone beryllium capable archetypal request for 25,000 to 50,000 units. By mode of comparison, Apple (AAPL 1.48%) shipped 240 cardinal iPhones successful 2021. So, astatine the outset, this is not going to beryllium immoderate benignant of money-making project. But it could pb to overmuch broader, wide-scale adoption for Solana, arsenic good arsenic the attraction of much developers to the Solana ecosystem.

The caller Web3 paradigm

What Solana has successful caput is simply a caller paradigm for crypto. You whitethorn person heard of Web3 by now, and this crypto telephone is being positioned arsenic portion of the caller Web3 paradigm. The Web2 paradigm was a centralized exemplary successful which a fewer Big Tech companies controlled everything (and made a batch of wealth doing so). In contrast, the Web3 paradigm is simply a decentralized exemplary successful which users and creators power everything. That's wherefore the allure of Web3 is truthful large for galore crypto enthusiasts: It's each astir giving powerfulness backmost to the people. If you're a emblematic idiosyncratic oregon creator, this is wonderful. If you're an enforcement astatine a Big Tech company, it's clip to commencement worrying.

For example, 1 bony of contention successful the mobile satellite is however overmuch of their profits app developers request to springiness tech companies. Instead of collecting 100% of their profits from in-app transactions, they indispensable archetypal springiness a 30% chopped to Apple, for example. In May 2022, the ever-controversial Elon Musk weighed successful connected the substance via Twitter, calling this a "30% taxation connected the Internet." When you enactment it that way, it surely suggests that immoderate app developers mightiness privation to determination to Solana if that "tax" tin beryllium lowered oregon adjacent eliminated due to the fact that astir radical don't bask paying taxes.

Does Solana merit an innovation premium?

Solana has established itself arsenic a person successful the blockchain manufacture acknowledgment to the merchandise of caller innovations specified arsenic Solana Pay and Solana Mobile this year. The large question investors request to beryllium asking themselves is whether Solana present deserves an innovation premium. Solana is down astir 85% for the year, which seems to suggest that this crypto has been dramatically oversold. By mode of comparison, Ethereum (ETH -0.81%) is down astir 65% for the year.

Taking crypto mobile is simply a really, truly large idea. Most radical are astir apt blessed with their caller Google Pixel oregon Apple iPhone, and it volition beryllium hard convincing them that they request different phone. That mightiness beryllium wherefore Solana released the SMS successful June: It is simply a mode of ensuring that determination are caller apps and games acceptable to spell erstwhile the Saga telephone becomes disposable successful Q1 2023. 

Yes, this is simply a big, moonshot-type of stake for Solana. It could spell disastrously wrong, but Solana's founding squad seems assured that it is the benignant of high-risk stake that is worthy taking. I can't hold to spot wherever Solana is taking mobile crypto. And I besides can't hold to spot however rapidly Solana mightiness rebound adjacent year. Getting Solana astatine a beaten-down valuation present seems similar excessively overmuch of a bargain to walk up. For that reason, I americium bullish connected Solana heading into 2023.