Wrapped SOL (Wormhole Avalanche)

SOL

WSOL on Avalanche chain is a bridged version of SOL. SOL is the native currency of the Solana chain used for gas fees and security.

Risk Rating
Best
$180.81
6.91%
Summary
What we like
WSOL is a wrapped version of SOL that enables it to be easily used within DeFi. SOL is the native blockchain token used to pay for transaction fees on the Solana network. A portion of fees (~50%) from network operations are burned to reduce the supply and increase SOL scarcity for token holders.
What we like less
SOL transferred through the Portal (Wormhole) bridge requires more trust assumptions as the bridge depends on external validators. The chain is also highly unreliable as there have been several network halts over the last twelve months.
What it means for you
SOL has risen to a top alternative Layer-1 token with intrinsic value given its utility to pay for transaction fees, solid network usage, and deflationary mechanisms.
Information
Blockchain
  • Avalanche
Key Metrics
  • Volume (24H): $5.8M
  • ATH: $213.63 (03/18/2024)
  • ATL: $8.23 (12/29/2022)
Risk Assessment
Best
Asset Strength

WSOL is a large-cap, fully collateralized asset. This asset is exposed to the underlying risks of Portal (Wormhole) bridge, a protocol rated as Watch out.

Asset Tokenomics

WSOL has an uncapped supply but has inflation control or burn mechanisms in place. WSOL on Ethereum is backed 1:1 by SOL locked in the Portal bridge protocol on the Solana chain.

Dependencies

Portal Bridge

Things to know about SOL

What is SOL used for?

The SOL token has two main use cases: to pay for gas fees on the network and for staking to secure the blockchain. The Solana network requires a small amount of SOL to execute transactions on the blockchain. Validators on the network are required to stake SOL to process network activity in return for staking rewards and transaction fees (paid in SOL).

SOL tokenomics

The total supply of SOL is uncapped with a perpetual inflation rate. Solana initially launched with 500M tokens, after which the Solana foundation burned 11M tokens. The initial distribution of tokens consists of investors (37%), founders (25%), and community reserve fund (38%). SOL is constantly being emitted as an inflationary reward for validators. The initial inflation rate is 8% and will decline 15% per year until it reaches an annual rate of 1.5%, which is expected by 2031. The total supply is expected to expand to nearly 700M tokens by year 8.

How does SOL accrue value?

A portion of fees (~50%) paid to execute transactions on the Solana network are burned, reducing the supply, and increasing the SOL token's scarcity. This deflationary effect will largely be offset in the beginning by inflationary token emissions to reward validators. Stakers receive inflationary emissions as well as the remaining portion of each transaction fee.