The SOL token, which is linked to the network, has more than quadrupled in the past month. Solana bills itself as the world’s fastest blockchain and its website says the average cost per transaction is $0.00025.
“There’s been a lot more interest institutionally,” Bankman-Fried said. Solana is “one of the only blockchains that has a compelling long-term road map” that will be eventually able to support industrial uses of crypto, he added.
Solana is an enterprise-grade blockchain, which was created by Anatoly Yakovenko. It is backed by Alameda Research and FTX Exchange, which all fall under the watchful eye of crypto billionaire Sam Bankman-Fried. According to Bankman-Fried, Solana’s compelling long-term roadmap as a blockchain means that it will be able to support industrial uses of crypto. According to Bankman-Fried, NFTs, decentralized finance, and the launch of the Pyth Network market-data feed has contributed, at least in part, to Solana’s popularity. Bankman-Fried is busy with the development of the Serum derivatives exchange on top of Solana’s network.
Solana’s DeFi projects have crossed $3 billion this month. This is another milestone that shows Solana's promise and ability to give competition to Ethereum. At the moment, Ethereum hosts the maximum number of DeFi and NFT projects.
What also contributed to SOL’s dramatic rise was the launch of NFT Degenerate Ape Academy built on Solana blockchain on August 15. A collection of 10,000 cartoon apes sold out in merely 8 minutes, involving 96,000 SOL or $5.9 million. So far, Ethereum has a nearly complete monopoly on DeFi and NFT projects.
Solana’s bullish run on the market is attributed to a general sentiment among investors that favour blockchains with smart contract capabilities. Terra, Cardano, and Polkadot blockchains have also made significant gains this month. All these networks have smart contract capabilities and are considered ‘Ethereum Killers’ because of their potential to compete with Ethereum.
Solana has surged over 3200 percent since August last year. One of the main factors that led to this spectacular performance is a spike in investors’ interest in Ethereum’s competitor platforms with DeFi, NFT, and smart contract offerings.
Explained: Why Solana is outperforming Bitcoin and Ether
Solana has dominated the cryptocurrency market throughout August as its prices tripled during the month. By the end of the month, it had crossed the $100 mark, starting from $36. With this, it also became the seventh-largest coin by clocking $54.7 billion in market cap.
What's behind Solana growth?
Solana has surged over 3200 percent since August last year. One of the main factors that led to this spectacular performance is a spike in investors’ interest in Ethereum’s competitor platforms with DeFi, NFT, and smart contract offerings.
DeFi and NFT platforms are decentralized apps built by developers on a blockchain. A DeFi platform can pool crypto funds and make them available to crypto borrowers. A piece of art, music, or literature can be an NFT, and it can be traded on the NFT platform that hosts it. While smart contracts are software programs that mimic a legal contract. Once hosted on a blockchain network, the software program will work in an automated manner without anybody having the technical capacity to change the program.
Solana’s DeFi projects have crossed $3 billion this month. This is another milestone that shows Solana's promise and ability to give competition to Ethereum. At the moment, Ethereum hosts the maximum number of DeFi and NFT projects.
What also contributed to SOL’s dramatic rise was the launch of NFT Degenerate Ape Academy built on Solana blockchain on August 15. A collection of 10,000 cartoon apes sold out in merely 8 minutes, involving 96,000 SOL or $5.9 million. So far, Ethereum has a nearly complete monopoly on DeFi and NFT projects.
Also Read | Cardano is all the rage right now – here’s why
Institutional interest
Over the last few months, institutional interest in Solana has increased, which may have contributed to the spike in investor interest. On its part, Solana forged new contracts with Hacken Foundation and Gate.io.
Osprey Funds and Grayscale are in a race to win Solana for inclusion in their respective bouquet of products. Osprey Funds has already registered Osprey Solana Trust with the US Securities and Exchange Commission (SEC).
Solana’s bullish run on the market is attributed to a general sentiment among investors that favour blockchains with smart contract capabilities. Terra, Cardano, and Polkadot blockchains have also made significant gains this month. All these networks have smart contract capabilities and are considered ‘Ethereum Killers’ because of their potential to compete with Ethereum.
However, Ethereum is on course to implement major upgrades over the next year as part of Ethereum 2.0. It’s going to shift from the ‘Proof of Work’ to the ‘Proof of Stake’ network, which will lower the transaction time and fees on Ethereum. Solana uses “Proof of History” and “Proof of Stake” to validate transactions that make the network more trustworthy.
These are also Layer-1 blockchains in contrast to Layer-2 blockchains such as Polygon developed on the Ethereum network. All of them offer faster transactions, lower fees, and higher scalability compared to Ethereum. Layer-1 can compete with Ethereum while Ethereum-based Layer-2 networks can end up scaling Ethereum rather than competing with it.
DeFi and NFT have emerged as the new frontiers of growth in the blockchain ecosystem. And, investors seem to be bullish on the potentials that Solana brings to the table.
On August 31, Solana launched a five-week Ignition Hackathon that will focus on DeFi, Gaming, NFT, and Web 3.0. Analysts say that with all these efforts and fundamentals, it should not take long for Solana to soar past the 7th largest coin, Doge. Currently, Doge is a meme coin and valued at $39.5 billion.