Solana’s Unmatched Growth: Beating Bitcoin and Ethereum This Bull Market
Solana is a fast-growing blockchain that has seen its native SOL token increase over 12,000% in value this year. The open-source project aims to solve the scalability issues of other blockchains like Bitcoin and Ethereum by using a combination of proof-of-history and proof-of-stake consensus mechanisms.
The Solana blockchain can currently handle over 50,000 transactions per second, compared to just 15 for Ethereum and 7 for Bitcoin. This huge transaction throughput and fast block times have attracted a lot of interest from developers looking to build decentralized apps and crypto projects. Over 400 projects have launched on Solana this year across DeFi, NFTs, Web3 and more.
The surge in activity on Solana has led to a massive rise in the price of its SOL token. SOL started the year trading at just $1.51 but has since skyrocketed to over $200, giving it a market cap of $57 billion. This makes Solana the fifth most valuable cryptocurrency behind only Bitcoin, Ethereum, Binance Coin and Tether. While Bitcoin and Ethereum have also seen strong gains this year, Solana’s growth has far outpaced them, highlighting its status as the breakout star of crypto in 2021.
Solana’s success has been driven largely by the booming NFT and DeFi sectors. Solana’s fast transaction speeds and low fees have made it an ideal platform for NFT marketplaces like Solanart, DigitalEyes and SolSea. These platforms have facilitated the launch of collections like the Degenerate Apes, SolPunks and Aurory that have generated hundreds of millions in sales volume.
Solana’s DeFi ecosystem is also expanding rapidly. The total value locked in Solana DeFi platforms has grown from just $1 million in January to over $14 billion today. Lending platform Solend Finance and DEXes like Orca and Raydium have proven popular with users looking to trade tokens, provide liquidity and earn yield. The success of these platforms is bringing more and more liquidity and users into the Solana ecosystem.
While Solana has seen unmatched growth this year, there are still risks and challenges ahead. The network has suffered several outages that halted activity for hours. There are also concerns about the centralization of Solana’s validators. Just 12 validators control more than 50% of the network, raising questions about its decentralization. However, the Solana Foundation is working to address these issues and continue Solana’s progress.
If Solana can scale further while maintaining security and decentralization, it has the potential to become a dominant blockchain for finance and digital assets. The growth of NFTs, DeFi and Web3 is still in its early stages, and Solana appears poised to benefit substantially as these sectors continue to expand. Another bullish year in 2022 could see Solana cement itself as a leader in crypto and Web3 alongside Ethereum and other major platforms. While risks remain, Solana’s unmatched growth this year shows that it is a blockchain to watch.
