Ethereum-killer Solana has continued with its mega bull run hitting a new all-time high of $250 earlier today. With this move, Solana has emerged as the fourth largest cryptocurrency with a market cap of $72.9 billion while toppling top players like Cardano (ADA).
Solana has been on an unstoppable rally throughout this year, especially over the last three months. The SOL price has multiplied 166 times since the beginning of 2021 and has emerged as one of the top-performing altcoins in the ecosystem. With such a staggering 16000% gain this year so far, Solana has been the talk of the town among investors.
The Solana blockchain has popular for its ultra-fast transactions at extremely low cost. Besides, the rapidly rising gas fee on the Ethereum blockchain has forced more DeFi players to opt for affordable solutions like Solana. As per data on DeFiLlama, the total value locked of all DeFi protocols on Solana has reached close to $15 billion.
Furthermore, the NFT sales taking place on the Solana ecosystem have also skyrocketed. Well-known crypto analyst and investor Scott Melker explained the reason behind the growth of Solana. He said:
“Solana is a legitimate competitor to Ethereum, with lightning fast transactions at a fraction of the price. The rapid increase in value is largely a result of crypto gaming and successful NFT launches. Developers and projects have been building on Solana for years, which is manifesting in an explosion of price and adoption.”
Why Solana Has Been Skyrocketing This Year?
Although the rising gas fee is one reason for DeFi players to move to Solana, the Solana has also witnessed strong development in place. The Solana blockchain has a throughput of 710,000 transactions per second (TPS).
The Solana blockchain improves this scalability using Proof-of-History (PoH) consensus model combined with the existing Proof-of-Stake (PoS). Furthermore, the platform facilitates a wide range of decentralized applications (DApps) which was not possible before.
There’s been a lot of talk about Solana flipping Ethereum in the future but that looks a distant mile at present. Currently, the Ethereum ecosystem is seven times the size of Solana. Furthermore, with the transition to Pos Ethereum 2.0, it will get more difficult for Solana to compete.
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