In recent months, the market has seen the rise of Solana (SOL), which has become one of the largest digital currencies by market capitalization. Valued at more than US$ 75 billion, SOL is currently the fourth largest cryptoasset, according to CoinMarketcap’s ranking.
Since the beginning of 2021, Solana’s price has accumulated a valuation of 14.000%. Moreover, this past Saturday (6), the cryptoasset broke the level of US$ 260 for the first time on the market.
According to a survey published by Bloomberg, some reasons justify this appreciation and the great recognition in the market; check it out:
1. Smart contracts
Like Ethereum, the Solana network is considered a platform for developing decentralized applications (D’Apps). According to an interview with Pantera Capital partner Paul Veradittakit, the Solana network can be regarded as one of the largest developers of smart contracts in the crypto market.
“Right now, I would say Solana is the top competitor in terms of adoption and developers boost compared to any of the smart contract platforms”.
2. Network speed
In 2017, developer Anatoly Yakovenko started the development of the Solana network. Shortly after that, in 2020, the digital currency that is part of the platform, Solana (SOL), was launched.
One of the Solana network’s biggest differentials is the speed of processing transactions recorded through smart contracts. While the bitcoin network can execute only 7 transactions per second, for example, and the Ethereum network less than 100, Solana can register 65,000 transactions in just one second.
3. Good and cheap
The speed of transaction confirmation on the Solana network may represent one of the best performances in the crypto market. But in addition to speed, the network has a low operating cost.
According to the network’s developers, the average cost per transaction is only US$ 0.00025. This is well below the fees charged by the Ethereum network, which charges an average of US$ 53 per transaction.
4. There’s still room to grow
When bitcoin cost US$100, few investors imagined that the cryptoasset would break through the US$ 66,000 mark by 2021. Considering this accumulated appreciation over the past few years, is there room for bitcoin to get another 66,000% appreciation?
According to Bloomberg, this may be “unlikely”, which is why Solana is presented as the “new bitcoin” in the report. For Oanda senior market analyst Ed Moya, Solana may overtake ethereum and bitcoin in the market.
“Solana skyrocketed this year. There’s still this belief that you have a lot more growth potential and that it may possibly surpass bitcoin and ethereum in the short term”.
5. A great community behind it all
No cryptoasset survives long in the market without a solid community behind it all. Through social media, Solana has gained a large community of users who advocate for the digital currency.
With a large community, it consequently increases the usage and adoption of Solana in the market. Although the Solana network faced a 17-hour shutdown in September 2021, this altcoin can still surprise.