1 Big Reason to Buy Solana Right Now, and 1 Reason to Be Cautious

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issue stocks, blockchains that issue cryptocurrencies can be analyzed by the amount of revenue they produce. Assets with more revenue and more revenue growth are likely to be better investments than those without.By that standard, Solana (CRYPTO: SOL) is worth looking at closely as a potential investment. On Sept. 18 alone, its decentralized applications (dApps) generated roughly $6.9 million in revenue, more than the next 10 chains combined, and nearly three times the next largest competitor's tally for the day. That certainly adds to the case for buying it, but when that fact is put in context, investors will also find some reasons to be a little bit cautious here.Image source: Getty Images.Before getting into the weeds, let's start with a quick definition. In this context, "application revenue" is the sum of revenue earned by apps on a chain, which is distinct from base gas fees. By convention, the metric excludes stablecoin issuers, liquid staking, and gas itself. It's a basic measurement of the level to which actual users are paying apps for their services.So when Solana's apps pulled in millions of dollars over a 24-hour period, outpacing not just its biggest competitor, Ethereum, but the rest of the field in aggregate, it was a big deal. What's even more salient is that over the prior 30 days, Solana's total application revenue of $211 million was more than twice Ethereum's, so these results were not just a blip.If you want one reason to buy Solana right now, this is it: There are customers consistently paying to use the applications on its chain, and far more of them than on any other network.But why does this matter in the bigger scheme of things? The main reason is that app revenue tends to compound.When app developers see users paying for services, they're heavily incentivized to make and ship more of their products to that venue. Then the growth flywheel spins even faster as customers see that they can address multiple needs within the same ecosystem. Solana is thus where many developers perceive the growth to be.Investors should also understand how this value generation accrues to Solana itself rather than just to application-related tokens.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,664.36 +32.40 (+0.49%)Dow 3046,315.27 +172.85 (+0.37%)Nasdaq22,631.48 +160.75 (+0.72%)Russell 20002,448.77 -18.93 (-0.77%)VIX15.45 -0.25 (-1.59%)Gold3,705.80 +27.50 (+0.75%)PortfolioSign in to access your portfolioSign inTop gainersOKLO Oklo Inc. 135.23 +30.26 (+28.83%)BHF Brighthouse Financial, Inc. 57.59 +12.33 (+27.24%)QUBT Quantum Computing Inc. 23.27 +4.92 (+26.81%)MENS Jyong Biotech Ltd. 65.62 +13.87 (+26.80%)SMR NuScale Power Corporation 46.77 +8.65 (+22.69%)Top losersDXCM DexCom, Inc. 67.45 -8.33 (-10.99%)HESM Hess Midstream LP 35.36 -4.12 (-10.44%)VOR Vor Biopharma Inc. 27.24 -3.16 (-10.39%)CART Maplebear Inc. 41.50 -3.90 (-8.59%)ORLA Orla Mining Ltd. 10.22 -0.85 (-7.68%)Most activeOPEN Opendoor Technologies Inc. 9.57 -0.37 (-3.72%)INTC Intel Corporation 29.58 -0.99 (-3.24%)SNAP Snap Inc. 8.16 -0.28 (-3.32%)NVDA NVIDIA Corporation 176.67 +0.43 (+0.24%)BBAI BigBear.ai Holdings, Inc. 6.85 +0.57 (+9.08%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 115,803.22 +491.05 (+0.43%)DIS The Walt Disney Company 113.76 -1.10 (-0.96%)ETH-USD Ethereum USD 4,485.02 +29.20 (+0.66%)JOBY Joby Aviation, Inc. 16.58 +1.95 (+13.33%)XRP-USD XRP USD 2.98 -0.01 (-0.45%)Top economic events