Justin Bons Dismisses Solana (SOL) Comparisons to Terra (LUNA), Calls Concerns FUD

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

Crypto observers have raised concerns about Solana (SOL), comparing its blockchain network to the ill-fated Terra token, Luna (LUNA), which collapsed in 2022, triggering a crisis in the crypto industry.

However, renowned cryptocurrency researcher Justin Bons has dismissed these comparisons as FUD (fear, uncertainty and doubt). FUD is a term commonly used within the crypto community to describe what they perceive as deceptions or exaggerations spread by crypto skeptics to scare off investors. In this case, Bons argues that the growing concerns about Solana’s economic design are simply unfounded.

Justin Bons on Solana’s “Conventional” Economic Design

In an extensive post on the X (formerly Twitter) platform, Justin Bons of Cyber Capital argued that Solana has an “excellent” economic model, which is vastly different from LUNA’s flawed design. According to Bons, the “fear-mongering” surrounding Solana’s economic design is merely 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,” stated 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 utilizes economic principles pioneered by major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). As is the case with most blockchains during their early stages, SOL’s high inflation rate is bound to decrease gradually over time.

Furthermore, Bons stated that Solana has implemented a model similar to Ether’s novel EIP-1559, indicating that the two blockchains have similar economic designs. According to him, the only difference between Solana and Ether is that SOL is scalable, whereas ETH’s scalability remains a persistent issue.

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 favorable 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.

Interestingly, Bons admitted that he was once a Solana critic but has since changed his stance following the network’s improvement. As such, he advises those who continue to fabricate false narratives to justify their rejection of Solana to reconsider their mindsets, as there is currently nothing exceptional or concerning 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!”

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