Research Summary
The report discusses the growth and potential of Solana and Metaplex (MPLX), highlighting Metaplex’s role in token creation on Solana and its potential as a profitable investment due to its sustainable economic model and token buyback program.
Key Takeaways
Solana’s Transition to a Major Crypto Player
- Solana’s Rise: Solana has transitioned from being one of many Alt L1s to a genuine Ethereum competitor, with its native token SOL now considered one of the Crypto “majors”.
Metaplex’s Role in Solana’s Ecosystem
- Metaplex’s Function: Metaplex is involved in the creation of tokens on Solana, both fungible, non-fungible and hybrid tokens. It offers tools for developers to create tokens and has been a significant contributor to the surge in fungible tokens created on Solana.
Metaplex’s Economic Model and Token Value Accrual
- Metaplex’s Revenue: Metaplex charges a SOL-denominated fee for the various services they offer, generating an average of 2000 SOL per week, which equates to $270k/week or $14m/year.
- Token Buyback Program: Metaplex announced that 50% of all protocol fees will be used to buyback MPLX, introducing a direct value accrual component to the MPLX token.
Metaplex’s Growth and Future Prospects
- Metaplex’s Growth: Metaplex has seen strong metrics, with 834k unique wallets directly signing transactions with the protocol in May, the highest month of all-time. The total number of Metaplex collectors reached 53 million unique wallets, an increase of 3.1 million wallets month-over-month.
- Future Prospects: With the products they have in the pipeline, such as the Oracle plugin, Metaplex’s future revenues are expected to be even more diversified.
Investment Potential of MPLX
- Investment Potential: With strong metrics, an expanding product suite, and ~$7m of buybacks, MPLX is considered an attractive token. A rerating is expected as the market begins to appreciate Metaplex as a full-stack token creation suite or as buybacks slowly impact the market price.
Actionable Insights
- Monitor Solana’s Growth: Given Solana’s transition to a major crypto player, it would be beneficial to keep an eye on its growth and developments.
- Research Metaplex’s Role in Solana: Understanding Metaplex’s role in Solana’s ecosystem and its contribution to the surge in fungible tokens could provide insights into its potential growth.
- Assess Metaplex’s Economic Model: Evaluating Metaplex’s economic model, revenue generation, and token buyback program could provide a clearer picture of its investment potential.
- Track Metaplex’s Growth and Future Prospects: Monitoring Metaplex’s growth metrics and future product pipeline could provide valuable insights into its future performance.
- Consider MPLX’s Investment Potential: Given the strong metrics, expanding product suite, and buyback program, MPLX could be a token worth considering for portfolio diversification.
