The cryptocurrency linked to the network Solana has jumped to seventh place among the 10 virtual currencies largest companies in the world amid optimism that 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 has benefited greatly from the mania that is taking place in NFTs,” wrote about the cryptocurrency, Antoni Trenchev, co-founder of crypto lender Nexo, in an email.
What are NFTs?
NFTs are non-fungible tokens used to trade digital collectibles. He said the backing of crypto figure Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, is helping.
Solana bills itself as the fastest blockchain in the world and its website says that 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.
“Major players in the space, such as FTX and Jump, are recognizing its potential,” Alexandra Clark, a sales operator at UK-based digital asset broker GlobalBlock, said in an email on Monday.
“Not only that, but the network’s foray into NFT with Solanart, the market built on top of the SOL blockchain, has been instrumental in driving the price of altcoin,” he said. “The current SOL price rally is likely to continue,” he added.
Will cryptocurrency help bolster decentralized finance?
Late last month, Jump Trading-affiliated crypto market data provider Pyth Network launched on Solana’s mainnet, a development that is expected to help bolster the world of decentralized finance. There are plans for it to soon be able to transmit market data through the so-called Wormhole Network.
“It’s getting too big to ignore and offers a different smart contract solution than Ethereum,” wrote Jonathan Cheesman, head of institutional and over-the-counter sales at FTX, in an email. It is to be remembered that the price of Ethereum shot up after confirmation that Elon Musk is its owner.
So-called altcoins such as Solana’s SOL, Cardano’s ADA, and Binance Coin have surged in recent weeks, taking part of the spotlight from major Bitcoin and Ether tokens in a broad crypto revival from a loss in May.
Bitcoin It has also rebounded and approached $ 52,000 on Monday. However, skeptics argue that the tech upgrades that some tokens push may not justify the scale of the rallies.
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