Solana gains 33% to shoot past Cardano and Tether – but a 12M SOL cover-up haunts the project

  • Solana has continued to rise on the charts and after a 33 percent weekly gain, it’s now surpassed Cardano and Tether to rank fourth.
  • Even as it soars, Solana’s shady games in which it hid 11 million SOL coins and then lied about burning it have resurfaced and spooked some investors.

Solana has been the cryptocurrency to watch in the past year. The project has gained over 16,000 percent this year to now trade north of $250. But it’s not just the price gains for Solana – the project has become a formidable blockchain network and a real Ethereum competitor. It now has the fourth-highest NFT sales, four times higher than Polygon. Solana is clearly here to stay and traders are already eyeing $400 as SOL continues to shoot up the charts.

In the past 24 hours, SOL gained 1.6 percent to trade at $252 at press time. It has been one of the best performers in the past week, gaining 33.3 percent. Having started the year at just $1.6, it has gained about 16,000 percent year to date.

SOL now has a market capitalization of $75.7 billion, equal to automobile giant Ford and Japanese giant Mitsubishi. This is the fourth-highest in the cryptocurrency industry, with SOL now bigger than Tether and Cardano.

Solana’s rise is based on being able to do what Ethereum would want to but can’t, at least not yet. It relies on proof of stake and proof of history consensus mechanisms making it extremely fast, supports smart contracts at very low fees and allows for massive scaling for dApps.

NFTs have been the area that Solana has made the most progress. According to CryptoSlam, NFT sales on Solana are now worth $574 million from 91,000 buyers. Only market leader Ethereum, Ronin and Flow blockchains have seen higher sales. Solana has five times higher sales than Polygon and 100 times higher than the Binance Smart Chain.

The shady hidden (and exposed) Solana tokens

As Solana soars, some shady activities by its team are coming back to haunt the project. Justin Bons, the founder of Cyber Capital, a VC firm that invests in cryptocurrency projects, took to Twitter to hit at one of Solana’s biggest reputation stains.

The 2020 scandal saw Solana admit to having hidden 11.3 million SOL from the community and handed it to a market maker. As founder Anatoly Yakovenko came out to reveal, the intention was pure. All he wanted to do was ensure there’s enough liquidity for the SOL market and ensure “that buy and sell orders always get met, regardless of macro conditions, seasonality, or daily fluctuations in trading volume.”

The problem: we did not disclose this information to the public, as well as the size and nature of the loan,” he admitted. He added:

We apologize deeply for any confusion this may have caused. It pains us greatly to see the discord and distraction this oversight has caused to our community of over 150,000 members globally.

Anatoly promised that the Solana Foundation would take back the 11.3 million SOL tokens and burn them in a month. But it didn’t. It only recalled about 3.3 million tokens and the rest hit the market. In essence, Solana’s great success today was built on this lie and cover-ups.

This seems to have had little effect on the success of the project and it continues to set new highs. According to one renowned analyst, this might be down to its alleged partnership with Tether which has been accused of manipulating projects at will.

About Author

Steve has been a blockchain writer for four years, and a crypto enthusiast for even longer. He is most excited by the application of blockchain to solve the challenges facing developing nations.

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