Almost a year and a half after its launch in March 2020, Solana’s SOL token has made its way into the top ten cryptocurrencies after a price surge of over 72% and an all-time high of $ 81.81 last week.
With the project’s market cap currently at $ 21.1 billion, futurists say Solana has only just started. Here’s a look at the technology behind this revolutionary project and the factors that contributed to its recent success.
Solving the blockchain trilemma
Solana’s first win comes in the form of its unparalleled ability to solve the blockchain trilemma, a problem that has haunted developers since the dawn of blockchain technology. It essentially states that among the three factors of decentralization, scalability, and security, a blockchain network must 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 few web-scale blockchain networks that has managed to achieve a throughput of 50,000 TPS with its test network and to solve the problem of scalability without layer 2 solutions.
Additionally, 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 unprecedented level of decentralization and ensure security within the network.
This robust infrastructure makes Solana the ideal 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 also borne out by the fact that Mango Markets, a DEX operated by Solana, raised $ 70 million in 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 its success.
The wormhole effect
Another factor that contributes to Solana’s success is the wormhole project. The wormhole is a bidirectional bridge that connects two blockchain networks for the seamless transfer of tokenized assets. It enables DeFi projects to benefit from the high throughput and affordability of Solana. By opening a Bylane for non-native assets to invade the Solana ecosystem, it could eventually become the bridge that connects the DeFi ecosystem as a whole.
The innovative nature of this project has managed to attract the attention of the market. Solana’s announcement of the launch of Wormhole 2.0 could be one of the reasons for the recent price rally.
NFT sales and stock market 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 about 10,000 monkey tokens sold out in eight minutes. Solana exceeded $ 2.5 billion in trading volume with negligible fees of $ 0.01 during the sale, with no complaints of network congestion.
A potential Ethereum killer?
In the world of DeFi, Ethereum is the unrivaled superstar with an ecosystem consisting of over 3000 dApps and more. But since 2017, we’ve seen the emergence of next-generation blockchain networks like Polkadot, Cardano, Flow, and Tezos, touted as potential Ethereum killers.
These projects claimed to provide the solution to problems such as network congestion, high gas charges and lack of scalability that are prominent on the Ethereum network.
Although these projects are having their own success, they are nowhere near Ethereum. Solana, on the other hand, has seen immense growth in a short time of just one year. With its throughput reaching web scales and the ability to improve DeFi, Solana is definitely ready to be an Ethereum killer if implemented well.
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