- The total value locked (TVL) on the Solana has quadrupled in less than a month reaching close to $6 billion.
- Solana’s high transaction through and low costs make it an attractive platform for DeFi players.
Open source blockchain project Solana has been in the news all over the crypto landscape. Solana’s native cryptocurrency SOL has surged another 30 percent today hitting a new all-time high of $194. As of press time, Solana (SOL) is trading up 30 percent at a price of $185 and a market cap of $53 billion.
This also makes Solana (SOL) the seventh-largest cryptocurrency by market cap. If we see the monthly charts, the rise of Solana has been phenomenal since mid-August 2021. In less than a month’s time, the SOL price has quadrupled with a staggering 300 percet gain to investors.
This has also helped it topple some of the most popular market performers like Dogecoin (DOGE) and Polkadot (DOT). Solana is slowly gaining popularity as an Ethereum-competitor just like Cardano (ADA).
Its high network scalability allows the Solana blockchain to host a multitude of decentralized applications (DApps), DeFi Tokens, and NFTs. Besides, it’s very high transaction throughput makes it seem more attractive over giants like Ethereum.
The SOL price rally comes on the backdrop of improving fundamentals and high DeFi activity. Let’s take a look at some of them.
Fundamentals backing the Solana (SOL) price rally
Here we will be looking at the SOL fundamentals along with its comparison with some of the key market leaders like Ethereum. Here are a few interesting points mentioned by analyst Lark Davis.
- Solana is a fully functional blockchain with a transaction throughput of 65,000 transactions per second (TPS). Besides, the transactions costs are dirt cheap on Solana. On the other hand, Ethereum can process only 15 TPS with costs shooting with high network activity.
- Solana also has a token burning mechanism that burns a percentage of the transaction fee making it deflationary over time. Ethereum has just implemented its token burning mechanism with the EIP-1559 protocol during the London hardfork last month.
- Ethereum achieves higher scalability taking help from multiple Layer-2 scaling solutions. On the other hand, Solana scales without the need for any Layer-2 platforms.
- As of date, the Solana blockchain supports dozens of DeFi applications. The Yield on some of the DeFi protocols is very high making it more attractive for users. However, most of the DeFi protocols are similar to the ones on Ethereum.
- The total value locked with DeFi protocols on the Solana blockchain has reached close to $6 billion, as per data from DeFi Llama. This TVL has surged more than 4x just over the last month.
- Amid the growing NFT craze, Solana is becoming an attractive platform for NFT projects. Although most of the Solana NFTs are just copy-paste versions of the Ethereum NFTs.
- Earlier in June, Solana raised $314 million to attract DeFi projects. Solana has strong backing from crypto giants like FTX exchange. Besides, over the last few weeks, a significant amount of institutional money is flowing into Solana.
- Although Solana is getting major attention, it is nowhere in comparison to Ethereum when it comes to DeFi projects hosted on the platform. However, this is just the beginning for Solana.