Ethereum competitor Solana has just hit a new all-time high of over $ 100. But according to many experts, Solana is still in its infancy with a market capitalization of currently US $ 21.1 billion. Here’s a look at the technology behind this revolutionary project – and the factors that contributed to its recent success.
Almost a year and a half after its launch in March 2020, Solana’s SOL token has found its way into the top 10 cryptocurrencies: the price has risen by over 72% and hit an all-time high of $ 81.81 in the past week .
With the project’s market cap currently at $ 21.1 billion, experts say Solana’s rally has only just begun. Below we take a look at the technology behind this revolutionary project and the factors that contributed to its recent success.
The solution to the blockchain trilemma
Solana’s first win lies in its unprecedented ability to solve the blockchain trilemma – a problem that has haunted developers since the dawn of blockchain technology. It basically states that of the three factors of decentralization, scalability and security, a blockchain network has to sacrifice one in order to properly implement the other two.
Solana is a fourth generation blockchain network that appears to have found a solution to this problem. It is one of the only blockchain networks on the web scale that was able to achieve a throughput of 50,000 TPS with its test network and thus solved the problem of scalability without a layer 2 approach.
In addition, Solana combines the Proof-of-Stake (PoS) mechanism with 8 core technologies such as PoH (Proof-of-History), Tower BFT, Turbine, Gulf Stream, Sealevel, Pipeline, Cloudbreak and Achievers to create an incomparable one Ensure a degree of decentralization and security within the network.
This robust infrastructure means that Solana could be the preferred platform for the next generation of dApps (decentralized applications) as it can eliminate problems such as network congestion, high gas charges or a lack of scalability. This is backed up by the fact that Mango Markets, a DEX operated by Solana, raised $ 70 million through crowdfunding last week.
As Solana’s solutions slowly move into the spotlight, DeFi projects like Power Ledger have started migrating from Ethereum to Solana – which continues to add to their success.
The “wormhole effect”
Another factor that contributes to Solana’s success is the wormhole project. Wormhole is a bi-directional bridge that connects two blockchain networks and enables the seamless transfer of tokenized assets. It enables DeFi projects to benefit from the high throughput and affordability of Solana.
The innovative nature of this project has managed to attract the attention of the market. The announcement of the launch of Wormhole 2.0 by Solana could also be one of the reasons for the recent price increase.
NFT Sales and Listings
Along with these other factors, the Degenerate Ape Academy’s NFT was the icing on the cake. The project chose the Solana network to host its sale – and the 10,000 or so Ape tokens sold out within eight minutes. Solana exceeded $ 2.5 billion in trading volume with negligible fees of $ 0.01 during the sale. And that without overloading the network.
A potential Ethereum killer?
In the DeFi world, Ethereum is the undisputed superstar – with an ecosystem consisting of over 3,000 dApps, and the trend is rising. But since 2017, next-generation blockchain networks have been added, such as Polkadot, Cardano, Flow and Tezos. They are touted as potential Ethereum killers.
These projects claimed to have the solution to problems such as network congestion, high gas charges and lack of scalability that are noticeable on the Ethereum network.
But: You are nowhere near Ethereum. Solana, on the other hand, has seen immense growth in the short period of just one year. With its throughput reaching web scaling and the ability to improve DeFi, Solana is definitely poised to be an Ethereum killer – if implemented well.
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