This week, Solana’s SOL coin rose and became the seventh most valuable cryptocurrency, overtaking meme coin Dogecoin. To reach this position, the coin increased by 26% to $125.98 but then fell back into the eighth position. This last month, Solana has increased by almost 220%!
Solana’s SOL coin was only introduced to the crypto market 18 months ago but already has a value of over $30 billion. This sudden rise makes SOL one of the fastest-growing cryptocurrencies in the market.
Why the sudden rise?
Solana is fairly new to the market, compared to the likes of Bitcoin and Ethereum, yet it seems to be increasing at impressive rates. Much of the reasoning behind Solana’s recent attention is the company’s entry into NFTs (Non-Fungible Tokens), which can be any form of digital asset.
Solan recently launched Degenerate Ape Academy, which sold cartoon pictures of apes. In the first 10 minutes of launching, 10,000 pictures were sold. This drove the value of SOL higher, as people were in need of the token to buy the apes. The cartoon apes depicted famous celebrities such as Paris Hilton and Gary Vee.
The value of the SOL coin was also helped by the August boom of NFTs, which sold around $900 million- hitting record sales! As well as this, the company has recently been focussing on decentralised finance projects (DeFi), which executes financial transactions over the blockchain. This cuts out any financial institutions and intermediates.
How Solana is taking advantage of NFTs
Solana has prioritised smart contracts, which are agreements stored on the blockchain that run when certain conditions are met. These agreements work to ensure that everyone is aware of the outcome. Smart contracts cut out intermediaries and speed up the process, they are also highly secure and reliable.
For now, their use of smart contracts has allowed Solana to take advantage of NFT and DeFi however other cryptos, such as Cardano, are also planning to use smart contracts which could create some competition in the space.
As well as smart contracts, Solana uses the proof-of-history (PoH) consensus, which keeps an accurate record of all messages, including their date and time. This allows for greater trust and scalability on the blockchain.
To ensure further reliability, Solano promises users that they will not be surprised by sudden taxes or fees when trading. This is appealing to traders who are still skeptical of the market and want reassurance.
Is SOL a rival for Bitcoin?
Solana has picked up almost $7 million in investments over the past week. Bitcoin, on the other hand, has been experiencing losses- the crypto giant has lost $2.8 million in investments over the same past week. However, SOL is still far off the price of Bitcoin.
Instead, it is Ethereum that could soon be rivalled by Solana. Solana is a cheaper tech than Ethereum and offers faster transaction speeds of 50,000 transactions per second.
Solana is currently on a high; however, as more blockchains begin to use smart contracts, it will see a significant rise in competition. The token could also be affected by the US investigation into the cryptocurrency market, which could threaten the value of all tokens.
