Solana’s SOL token has climbed to seventh spot in the top 10 cryptocurrencies by market cap.
The popular Ethereum rival has tripled in price over the last three weeks, reaching a market value of more than $41 billion. Solana has been attracting praise for its speed and low costs.
Antoni Trenchev, co-founder at crypto lender Nexo explained that “Solana has a growing ecosystem, projects are being built on it and it’s benefited hugely from the mania that’s taking place in NFTs”.
He also pointed to the support from Sam Bankman-Fried – chief executive of crypto exchange FTX – as being a factor in its success.
Solana presents itself as the world’s fastest blockchain with 400 millisecond block times and, according to its website, the average cost per transaction stands at only $0.00025. It also bills itself as censorship-resistant, meaning “the network will remain open for applications to run freely and transactions will never be stopped”.
In June it confirmed raising $314 million in a funding round with investors including Bankman-Fried’s Alameda Research, venture capital firm Andreessen Horowitz, Polychain Capital and CoinShares.
According to the report, that money was to be used to develop the blockchain and further widen market share. It could also be used to fund and boost developers to build on Solana rather than on competitors.
Too big to ignore
Last month, institutional-grade data oracle Pyth Network went live on Solana’s mainnet in order to integrate price data from cryptocurrency, US equities, foreign exchange, and commodities markets.
Jonathan Cheesman, head of over-the-counter and institutional sales at FTX confirmed there were plans for it soon to be able to broadcast market data through the so-called Wormhole Network.
“It’s becoming too big to ignore and offers a different smart contract solution to Ethereum,” he said.
Alternative coins like Solana’s SOL, Cardano’s ADA and Binance Coin recorded a significant rise during the last few weeks, partially affected by the broad crypto revival of some of the top tokens such as Bitcoin and Ether.
Solana is home to a host of decentralised products, including Serum, an exchange that has passed $4 billion in trading volume since its launch last August. Other users include Solible – an NFT marketplace and Atomic, a non-custodial crypto wallet.
However, skeptics argue that despite Solana’s fast rise and growing funds, it still faces hefty challenges. It is not the only prominent Ethereum would-be successor, as it must contend with Algorand, Cardano, Tezos, and Polkadot, among others.
