The high-speed blockchain Solana hits the accelerator. SOL’s price gains are no accident. What’s behind the rally at a new all-time high?
While the Bitcoin price is still on the hunt for the bottom after the shock at the weekend, Ethereum and the Ethereum-based DEX Uniswap can show strong daily increases in the top 10 by market capitalization. But even a potential “Ethereum killer” can come up with a strong performance recently: Solana (SOL) reached a new all-time high on April 22nd.
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What is Solana?
Solana is a highly scalable crypto platform that can achieve transaction speeds of up to 65,000 TPS. The most important technological innovation that Solana has brought to the crypto market is the Proof of History (PoH). In simple terms, the PoH is a clock that shows the clock for the entire network. Because all network nodes use the same reference for the time, it is possible to provide each transaction with an individual time stamp. For this, Solana uses a modified version of SHA256, the encryption algorithm that is used in Bitcoin. In conjunction with other technologies such as pipelining (compare FLOW) and Proof of Replication (compare Filecoin), Solana achieves a performance that should be able to compete with a centralized server.
Although the network is still in the beta stage, some projects – especially in the field of decentralized financial services (DeFi) – are already building on the platform. Probably the best-known Solana-dApp is the DEX Serum from the house FTX. With Raydium, another DEX was launched in spring 2021. In addition, Solana is working with Chainlink on a decentralized price oracle that delivers fresh price data every 400 ms.
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When it comes to stablecoins, too, the course is set for growth. The supply to tether (USDT-SPL) was 1.9 billion USDT-SPL at the time of going to press. In addition there are 420 million USDC-SPL, the Solana variant of the stablecoin USD Coin. For comparison: On April 4th it was 190 million USDT-SPL and 320 USDC-SPL. The rapidly growing stablecoin volume indicates an increased use of Solana in the DeFi area.
Why is SOL increasing?
In addition to DeFi, there are other factors that have recently given the Solana course a tailwind. So at the beginning of April the browser wallet “Sollet” was published, which is a kind of metamask for Solana. The strong price gains that SOL has shown within the last 24 hours correlate with two bullish news. On the one hand, the crypto derivatives exchange DyDx introduced perpetual swaps for SOL on April 21. On the other hand, Crypto.com, one of the largest crypto brokers, has the deposit and withdrawal of SOL on the same day unlocked.
At the time of going to press the SOL price was USD 36.99 – a daily plus of over 17 percent and not far from the all-time high of USD 37.75.
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