Solana (SOL -4.30%) has become one of the most talked-about cryptocurrency projects this year. Setting aside Solana's impressive growth and innovation since its inception, there's ongoing debate about whether Solana is worth a buy, given its recent hype. 

In 2022, Solana saw its value collapse amid its ties to the now-bankrupt crypto exchange FTX, as well as plunging transaction volumes. Last year, average daily fee payers dropped significantly compared to the prior year, with a decline of more than 50% in non-voting transactions. However, active development projects on the platform also saw a bump, surging 36% year over year. This indicates that, while user growth may be down, developers are still building on the Solana blockchain.

So, then, what do we make of these metrics? 

Let's dive into whether Solana is a buy, looking at a more holistic picture of this leading smart-contract-enabled proof-of-stake network. 

Solana in 2022

The Solana blockchain is among the leading smart contract blockchain networks in the world, focusing on high-growth areas of the market, such as non-fungible tokens (NFTs), becoming rival to the clear leader in this space, Ethereum.

Unfortunately, 2022 was not friendly to the Solana network. Besides ongoing network disruptions and outages, Solana had to contend with the failure of FTX and its embattled former CEO, Sam Bankman-Fried. As one of Solana's early backers, FTX held a significant amount of Solana on its balance sheet, leading to concerns that these tokens may be liquidated on the open market, which ultimately led to a downward spiral of selling activity. 

The close connection between Solana and FTX was enough to have many investors say "no, thank you." That said, investors were also forced to contend with very bearish market conditions for risk assets tied to a macro environment that deteriorated throughout the year as central banks hiked interest rates.

Moving forward

Thankfully, the start of a new year brought about a fresh perspective for all crypto investors, or so it seems. Despite the ongoing issues tied to FTX, and a macro environment that remains relatively bearish, investors have clearly found reasons to be hopeful in 2023.

Notably, Solana's developer team has improved the network's security measures dramatically. Notably, Solana has not experienced any downtime recently, which suggests that the platform's infrastructure is much more solid than it's been in some time. A series of upgrades (QUIC, QoS, and priority fees, among others) have led to this marked improvement. While many view a stable network as minimum requirements, the fact that Solana is now operating as it should is a big deal.

Additionally, active development on the Solana network continues to pick up steam. While much of this is tied to the NFT space, for those bullish on the continued growth of NFTs, that's a great thing. As fears of a Solana implosion (due to ties to FTX) fade, these sorts of positive catalysts appear to be increasingly priced in by the market, which is great news for long-term investors. 

Solana's outlook

Although Solana has demonstrated its capabilities throughout the third quarter and was able to withstand numerous challenges in 2022, the fourth quarter was a tumultuous period for the network. The collapse of FTX and the resulting contagion was a significant event in the year's final quarter. However, it should be noted that not everything was negative.

Despite being overshadowed by the events surrounding the FTX collapse, Solana's fourth quarter demonstrated that its network and ecosystem remain robust. The goal of adoption is still a priority, as seen in ongoing development, partnerships with companies like Instagram and Facebook, and expansion into areas such as GameFi and DePIN (Decentralized Physical Infrastructure Networks). Additionally, there have been improvements in network functionality and other potential drivers of growth.

I think that Solana's outlook overall remains relatively solid, despite these clear risks. Investors have had an opportunity to price in these risks. Thus far, I think most of what can be priced in has already been put into the price.

Now, considering how far and how fast Solana has risen in 2023, perhaps this token could give up some of its gains. That said, for long-term investors seeking a token with clear catalysts, this is one project I think should be on the watch list right now.