Solana raises ~$1.8 million in token sale

Smart contract platform Solana used a Dutch auction format to raise around $1.8 million from non-U.S. buyers in a recent token sale. The eight million SOL tokens (1.6% of the genesis block distribution) allocated to auction participants all sold for $0.22, giving the Solana network a fully diluted valuation of $110 million. Solana has now raised almost $26 million to date.

Why it matters:

• This public auction ended up pricing SOL below Solana’s last two private rounds ($0.225 per token in Jul. 2019 and $0.25 last month). Without the temptation of a quick flip for profit, these private investors might turn to staking their tokens on the network (it not already contractually required), which could provide a boost to the staking participation rate at launch.
• The SOL supply is not widely dispersed, as a small group of early investors and project affiliates (founders and foundations) will receive most of the tokens. A highly concentrated supply distribution does not meet the ideal definition of a decentralized network. Solana’s Proof-of-Stake (PoS) system could also increase the level of concentration, as PoS networks give early investors and recipients “a proportional right to all future issuance” and limit competitive claims on seigniorage. However, network validators could potentially serve as a future source of distribution, much like miners on Proof-of-Work (PoW) networks, as they sell staking rewards to cover hardware and energy costs.

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