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Solana takes off – price rises above $ 200

While almost the entire crypto market suffered major losses in the course of a flash crash on Tuesday, one crypto currency is visibly unimpressed – Solana (SOL). The high-flyer of the last few weeks continues his run unimpressed. In the meantime, SOL also saw its share price slide, but this was followed by a jump to over 200 US dollars.

In the meantime, Solana has also overtaken Ripple (XRP) in the ranking of the largest cryptocurrencies by market capitalization. Reason enough to review the last few weeks and take a look at the future course of SOL.

Solana overtakes Ripple

If you look at the SOL / USD chart, it is noticeable that Solana has recorded an increase in value of almost 30 percent in the last 24 hours alone. After large parts of the crypto market collapsed on Tuesday as a result of a flash crash, Solana recovered from the losses at an above-average rate. At the time of writing, the price was already close to $ 210. On Tuesday, the rate fell to just over 130 US dollars. Less than 24 hours later, SOL reached a new all-time high.

Share price development of SOL over the past 30 days. Source: Coinmarketcap

The great success of Solana catapulted the project to 6th place among the largest cryptocurrencies by market capitalization. With a market capitalization of around 59 billion US dollars, Ripple has left it behind and is already looking at the Binance Coin (BNB), which is around 5 billion US dollars heavier. With this, Solana underscores its reputation of being one of the fastest growing cryptocurrencies. But why is Solana suddenly so successful?

Solana: success was inevitable

The concept behind Solana is not new. But the project already offers functions and use cases that many other platforms have been talking about for years. Cardano (ADA) is currently working on the implementation of smart contracts and Ethereum (ETH) will need some time until Ethereum 2.0 is fully set up. Solana is already a comprehensive smart contract platform that is enjoying an increasing number of projects and developers.

New DeFi applications and NFT projects are constantly seeing the light of day on the Solana blockchain. Most recently, the Cyclos liquidity pool caused a sensation, which raised 2.1 million US dollars in capital. Together with DEX Serum, a SOL-based liquidity pool was created that attracts investors with above-average returns. But not only the projects attract investors, the technology itself is one of the decisive advantages that speak for Solana.

A combination of a Proof of Stake (PoS) and a Proof of History (PoH) ensure cheap and fast transactions. Secretly, quietly and quietly, Solana eyed herself at a high-flyer in the crypto world. You could almost say that success was inevitable. Little by little, a whole ecosystem is developing around Solana. For example, the Solana SafeCoin project claims the title of the most efficient network of all crypto projects. SafeCoin is currently working on a decentralized exchange called SafeSwap.

What’s next for Solana?

The current success of Solana strongly resembles the beginnings of Ethereum. And in fact, SOL could also develop into a serious competitor for Ethereum. While ETH is still struggling with expensive and slow transactions, developers are likely to increasingly focus on alternatives such as Solana. Current data from DeFi market observers show the first signs of this. For example, defillama reports a significant increase in the “Total Locked Value”, ie the capital tied up on Solana.

Solana (SOL)
Current DeFi data on tied capital on Solana. Source: defillama

With all the justified euphoria, Solana is still a little light compared to Ethereum and other smart contract platforms. Established projects such as Cardano, Ethereum or Polkadot have many times more projects and partners. Solana’s market capitalization is also still a long way from Ethereum’s $ 415 billion. The current price increase is therefore likely to be based on speculation rather than sustainable growth.

Conclusion: Solana pleases investors, long-term success is not yet foreseeable

Solana took off in the past few weeks. At the start of the year, SOL was still under $ 2. It is currently over $ 200. As a result of the price rally, the project is now one of the largest crypto currencies. And the success is no coincidence.

Solana’s technical background is likely one of the success factors. Solana is already offering what other projects have been promising for years. But investors shouldn’t forget that the current run is just a snapshot. In the long term, SOL has to prove that the hype is justified. Nevertheless, it turns out that Ethereum, Cardano and Co are by no means inviolable and that new projects can put a lot of pressure on the established platforms.

Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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