Is Solana poised to hit $200 by the end of 2021?
Solana has been climbing the charts and hit a new all-time high above $140 today. It has been the biggest mover on the cryptocurrency market and stands at $143.01 at the time of this writing, becoming the seventh-most valued cryptocurrency.
With a market cap of $41,009,922,443, Solana has gained by 19.85% in the past 24 hours, according to CoinMarketCap. So, let’s try to understand what’s driving the rise of SOL, the native token of the Solana blockchain.
Solana is a highly functional open source project that banks on blockchain technology’s permissionless nature to provide DeFi solutions. Work on the project began in 2017, but Solana was officially launched by the Solana Foundation in March 2020.
One of the essential innovations of Solana is the proof-of-history (PoH) consensus, which allows for greater scalability of the protocol and, in turn, boosts usability.
Solana has managed to attract a lot of interest from institutional investors as the blockchain offers incredibly short processing times. The protocol has the capability to serve both small-time users and enterprise clients.
Solana’s surge last week can be attributed to the mysterious update ‘Ignition’ on their official media handles on August 27. The team provided little details but got the community conspiring that it could be a token burn, as the ignition teaser has a purple flamed lighter.
The ‘Ignition’ teaser came with a caption that read, “The sky’s the limit. What will you launch?” with the dates August 31–October 8 mentioned below. This led to speculations that it could be an event for decentralized application developers or NFTs creators.
After a weekend of speculation and anticipation, Solana revealed that Ignition is a global hackathon aimed at catalyzing new platforms on the ecosystem.
From the first post on August 27, the price climbed from $74.81 to $130.01 on August 31.
Solana’s foray into the world of non-fungible tokens (NFT) in August is also one of the reasons for the network’s surge in popularity and price. The company launched Degenerate Ape Academy, which sold a collection of pictures of cartoon apes. 10,000 of these apes sold in the first 10 minutes, and users needed the currency SOL to buy these cartoon apes — thereby driving the SOL token higher.
Making further strides, blockchain-based music streaming platform Audius announced on Thursday that its integration with Solana NFT allows its more than 6 million users to begin featuring digital collectibles from the Solana library.
Ethereum was the first programmable blockchain that can host other cryptocurrencies and apps, but many other cryptos have followed in its footsteps since.
As Ethereum struggles with congestions and high fees, developers and investors are looking for alternatives to build their applications on.
Although Cardano has positioned itself as Ethereum Killer, Solana isn’t lagging much behind. If Solana’s strong performance continues, it is possible that it can emerge as one of the key players in the coming years.
Recently, Pyth Network, a real-time data feeder, announced going live on Solana’s Proof-of-Stake blockchain via its cross-chain tool, Wormhole.
To simplify, a wormhole is a solution to easily bridge between different networks. Solana’s wormhole makes it possible to move assets between Ethereum and Solana swiftly and at a lower cost. According to Solana, the next move for them is to connect Terra (LUNA) and the Binance Smart Chain.
Lastly, let’s not forget that Solana is one of the fastest cryptos on the block now, with its claim to process at least 50,000 transactions per second (TPS) at a cost of less than $0.01 per transaction.
Moving ahead, Solana says it will be able to process 700,000 TPS as its hardware improves. In comparison, Ethereum can handle 15 to 45 TPS, although it will get faster with an upgrade to ETH2.
The US authorities contemplating stricter DeFi regulation might pose as a challenge to the number of projects on the Solana platform.
Solana is the only currency with a two-digit surge in the past 24 hours, according to CoinMarketCap, and continues to rise as we near the weekend. Whether it will maintain its momentum, only time will tell.
Have you invested in Solana? Do you think Solana will hit $200 by the end of 2021? Share your comments below.