To dive deeper, checkout the complete article from the original source: https://droomdroom.com/how-treasuries-will-infuse-liquidity-into-solanas-blockchain-development/

Treasuries bring substantial buying power to cryptocurrencies through large-scale, debt-financed purchases, creating sustained demand that can stabilize and elevate prices. In Bitcoin’s case, treasury accumulation has been a major force behind long-term price resilience and reduced volatility. The same dynamic is now emerging for Solana (SOL), where treasuries are actively acquiring tokens from open markets.

This demand reduces available supply on exchanges, creating temporary imbalances that push prices higher as sellers are absorbed. As more retail and institutional holders see rising prices, they often delay selling, tightening supply further and supporting extended rallies. These price increases generate higher network revenue for the Solana Foundation through transaction fees and staking rewards, which in turn funds protocol upgrades, developer grants, ecosystem incentives, and infrastructure improvements.

Examples include Solana’s Alpenglow Protocol, which drastically reduced block finality time, made possible in part by revenue surges from earlier memecoin and treasury-driven rallies. Sustained high prices also attract more builders, increase dApp activity, improve liquidity, and strengthen the overall ecosystem—creating a virtuous cycle of capital-driven innovation.

While treasury buying can fuel growth, it introduces risks: concentrated holdings may allow influence over governance, and large future sales could trigger sharp corrections. These risks can be mitigated through governance caps on voting power, transparent treasury policies, and diversified market participation. When managed well, treasury accumulation acts as a stabilizing force that supports long-term development and adoption on high-performance chains like Solana.

To dive deeper, checkout the complete article from the original source: https://droomdroom.com/how-treasuries-will-infuse-liquidity-into-solanas-blockchain-development/

Treasuries bring substantial buying power to cryptocurrencies through large-scale, debt-financed purchases, creating sustained demand that can stabilize and elevate prices. In Bitcoin’s case, treasury accumulation has been a major force behind long-term price resilience and reduced volatility. The same dynamic is now emerging for Solana (SOL), where treasuries are actively acquiring tokens from open markets.

This demand reduces available supply on exchanges, creating temporary imbalances that push prices higher as sellers are absorbed. As more retail and institutional holders see rising prices, they often delay selling, tightening supply further and supporting extended rallies. These price increases generate higher network revenue for the Solana Foundation through transaction fees and staking rewards, which in turn funds protocol upgrades, developer grants, ecosystem incentives, and infrastructure improvements.

Examples include Solana’s Alpenglow Protocol, which drastically reduced block finality time, made possible in part by revenue surges from earlier memecoin and treasury-driven rallies. Sustained high prices also attract more builders, increase dApp activity, improve liquidity, and strengthen the overall ecosystem—creating a virtuous cycle of capital-driven innovation.

While treasury buying can fuel growth, it introduces risks: concentrated holdings may allow influence over governance, and large future sales could trigger sharp corrections. These risks can be mitigated through governance caps on voting power, transparent treasury policies, and diversified market participation. When managed well, treasury accumulation acts as a stabilizing force that supports long-term development and adoption on high-performance chains like Solana.