Solana breaks one all-time high after another. In the meantime, SOL has even risen to the top 10 largest cryptocurrencies by market capitalization. DeFi played a crucial role in this.
The high-speed blockchain project Solana hit two new all-time highs in the past week. On the one hand, the Total Value Locked (TVL) of all Solana DeFi projects reached a new high of 2.41 billion US dollars.
On the other hand, on August 18, the SOL price temporarily climbed to a new all-time high of 79.57 US dollars.
In the meantime the course has corrected a bit. At press time, SOL is still trading at over $ 72. On a weekly basis, SOL recorded a price increase of over 74 percent. In addition to the hype about the “degenerate monkeys” non-fungible tokens (NFT), the booming DeFi ecosystem is also likely to be responsible for Solana’s triumphant advance.
Solana DeFi ecosystem is booming
The capital in the Smart Contract of DeFi protocols on Solana has increased continuously over the past few weeks. At the same time, Solana projects seem to be increasingly popular with investors. The decentralized exchange Mango Markets, based on Solana, was recently able to collect over 70 million US dollars from a crowdfunding.
In addition to the option to exchange tokens, Mango’s platform also offers loans and derivatives trading. It tries to combine all functions offered by MakerDAO, Synthetix and Uniswap in one platform.
In addition, Solana recently launched Wormhole, a communication bridge between the leading DeFi blockchains. The interoperability protocol enables the Solana Blockchain to communicate with Ethereum, Binance Smart Chain and Terra. Put simply, Wormhole will help transfer digital assets such as tokens, NFT, but also exchange rate data between the blockchain networks.
This should make it much easier for developers and investors to access Solana, says Hendrik Hofstadt, head of the Jump Trading Group.
Data can cross this “trustless bridge” in both directions and cursor oracles from other blockchains can now transmit data to Solana.
Hofstad is also convinced that communication between different blockchains will be essential for success in the future.
Vitalik Buterin: “Decentralized governance has to be taken to the next level”
Vitalik Buterin published an article in August in which he deals in detail with the governance of decentralized protocols. The mastermind behind Ethereum is of the opinion that the existing governance token-based management mechanisms of many DeFi protocols are simply bad and prevent DeFi from reaching their full potential.
DeFi projects are repeatedly criticized because they allow large whales to decide on their own in governance votes. Some therefore accuse that large investors only make decisions that are in their own interest. In addition, it can happen that protocols are completely taken over by malicious actors or competitors – as was once the case with Steem.
For this reason, Vitalik believes that governance needs to be taken to the next level. In his article, the Ethereum CEO therefore describes in detail three different governance systems: limited governance, governance without tokens and skin in the game governance. All three options could therefore help to solve the fundamental problems that currently plague governance in DeFi space.