Some crypto observers have sounded the alarm on Solana (SOL), comparing the blockchain network to the ill-fated Terra token, Luna (LUNA), which collapsed in 2022, fueling a crisis that gripped the whole crypto industry.
However, well-known cryptocurrency researcher Justin Bons has dismissed these comparisons as FUD. FUD, for those who don’t know, stands for “fear, uncertainty and doubt.” The crypto community typically uses the pejorative to depict what they see as deceptions or exaggerations spread by crypto skeptics to scare off investors. Bons suggested that the growing concerns about Solana’s economic design are simply unfounded.
Justin Bons On Solana’s “Conventional” Economic Design
In an exhaustive post on the X (formerly Twitter) platform, Justin Bons from Cyber Capital argued that Solana has an “excellent” economic model, which is significantly different from LUNA’s flawed design. Bons asserted that the “fear-mongering” surrounding Solana’s economic design is mere FUD.
“Some people are acting as if SOL is the next LUNA… A ludicrous assertion, bordering on hysteria, considering that SOL has a conventional economic design,” said Bons.
The pundit noted that Solana has a long-term inflation rate of 1.5% and a 50% burn rate of the base fee, which “ensures long-term sustainability while the burn allows for scarcity”.
He highlighted that Solana leverages economic principles pioneered by major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). As is with most blockchains during their early stages, SOL’s high inflation rate is bound to decrease over time gradually.
Moreover, Bons stated that Solana had implemented a model similar to Ether’s novel EIP-1559, meaning the two blockchains have similar economic designs. According to him, the only difference between Solana and Ether is that SOL is scalable, while ETH’s scalability remains a nagging problem.
Is The SOL-LUNA Comparison Justified?
Bons also addressed concerns regarding Solana’s token distribution, pointing out that the network’s upcoming unlocks are actually more beneficial than those of other emerging blockchains like Aptos (APT), Sei (SEI), and Sui (SUI).
“These chains all have far bigger upcoming unlocks, and distributions are skewed far more towards insiders compared to SOL. So, the extreme narrative against SOL does not at all match the current reality,” he asserted.
Bons admitted he is a former Solana critic but has changed his tune since the network reformed. As such, he advises people concocting false narratives to justify their rejection of Solana to change their mindsets, as there is currently nothing unusual about SOL’s economic design.
“Quite the opposite; SOL has an ideal economic design, & if you do not recognize that you are sticking your head in the sand!”
