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Highlights
- SOL – the native token of the Solana network – has become the seventh largest cryptocurrency by market capitalisation.
- Solana’s platform boasts speedy transactions with 400 millisecond block times
- Solana’s impressive performance accompanies a list of altcoins (cryptocurrencies which aren’t Bitcoin) which have also seen impressive gains
The Solana platform’s native token – SOL – has leapfrogged Dogecoin to become the seventh largest cryptocurrency by market capitalisation.
Solana has a market cap of US$50.03 billion according to CoinMarketCap, which is approximately 13 per cent of the market cap of its biggest competitor – Ethereum.
The move follows an impressive three weeks for Solana which has seen its market value increase 300 per cent.
What is Solana?
Solana claims to have the fastest blockchain in the crypto world with average cost of each transaction is a low US$0.00025.
Solana’s platform boasts speedy transactions with 400 millisecond block times. Additionally, the platform actually gets faster the more people use it.
There are currently over 400 projects on the Solana blockchain, spanning decentralised finance (DeFi) NFTs and Web3.
Why is Solana Performing So Well?
The success of SOL can be attributed to the speed and lower cost of transactions on the Solana platform. The boom in interest surrounding non fungible tokens (NFTs) is also a likely key factor which has boosted Solana’s value.
Non fungible tokens have become all the rage this year with millions being paid for certain digital collectables. NFTs are digital collectables taking the form of art music or video. NFTs have gradually surged into the mainstream, with an Ethereum-based NFT – called CryptoPunks – being bought by credit giant, VISA. Last month, VISA purchased CryptoPunk #7610 – a digital character with green eye makeup and a mohawk - for US$150,000.
The Solana platform have released a collection of NFTs called Solarians, which are little digital images of robots. Solarians (of which there are no more than 10,000) are assembled from 200 different attributes with varying rarities based on the transaction hash.
The price of SOL, as of September 9, 2021, is US$169.87. This is remarkable considering its price at the beginning of 2021 was US$1.66. That marks an increase of an astonishing 10133.13 per cent.
Rise of the Altcoins
Solana’s impressive performance accompanies a list of altcoins (cryptocurrencies which aren’t Bitcoin) which have also seen impressive gains.
Solana’s SOL, Cardano’s ADA and Binance Coin have all performed strongly since May’s mass corrections which saw some cryptocurrencies lose half their value.
The rise in popularity of these altcoin’s could be attributed to delays surrounding upgrades to Ethereum, whose native token, Ether, is the world’s second largest cryptocurrency by market capitalisation.
Ethereum’s platform has seen a rise in users in the past year and while this has helped it narrow the gap on Bitcoin – the largest cryptocurrency – it has exposed the ageing network’s vulnerabilities when it comes to speed and overall scalability. This has seen users look to other platforms offering similar services and could also be the reason for Solana’s steep rise popularity in 2021.
With Ethereum 2.0 not expected to be completed by late 2022 or early 2023, this could see alternatives platforms like Solana close the gap on Ethereum.
