The cryptocurrency linked to the Solana network has jumped to seventh spot among the world’s top 10 largest virtual coins amid optimism that the blockchain could be a long term competitor to Ethereum.
Solana’s SOL token has tripled in about three weeks and now has a market value of more than $41 billion, according to CoinGecko. Proponents tout the claimed speed and lower cost of transactions on Solana for decentralized finance and digital collectibles, applications where Ethereum dominates.
“Solana has a growing ecosystem, projects are being built on it and it’s benefited hugely from the mania that’s taking place in NFTs,” Antoni Trenchev, co-founder at crypto lender Nexo, wrote in an email. NFTs are non-fungible tokens used to trade digital collectibles. He said the backing of crypto figure Sam Bankman-Fried -- chief executive of crypto exchange FTX -- is helping.
Solana bills itself as the world’s fastest blockchain and its website says the average cost per transaction is $0.00025. In June it announced that it had raised $314 million in a funding round with investors including Bankman-Fried’s Alameda Research, venture capital firm Andreessen Horowitz, Polychain Capital and CoinShares.
Late last month, Jump Trading-affiliated crypto market data provider Pyth Network went live on Solana’s mainnet, a development that’s expected to help bolster the world of decentralized finance. There are plans for it soon to be able to broadcast market data through the so-called Wormhole Network.
“It’s becoming too big to ignore and offers a different smart contract solution to Ethereum,” Jonathan Cheesman, head of over-the-counter and institutional sales at FTX, wrote in an email.
So-called alternative coins like Solana’s SOL, Cardano’s ADA and BINANCE Coin have surged in recent weeks, taking some of the limelight from top tokens Bitcoin and Ether in a broad crypto revival from a May rout. Bitcoin has also rallied and came close to $52,000 on Monday.
Skeptics argue the technological upgrades propelling some tokens may not justify the scale of the rallies.
