Solana, the public blockchain backed by crypto billionaire Sam Bankman-Fried, has reached a new all-time high in total value locked.
Solana continues to climb
If there has been one breakout star in 2021, it has to be Solana, which more than 100X’d its price from January to an all-time high of above $200 in October. That has propelled Solana from being one of many alternative layer-one blockchains to the number one rival of Ethereum and a favorite of many analysts to break the grip Ethereum has had on decentralized applications. For the rest of 2021, analysts predict Solana could enter the top five cryptos in terms of market capitalization (currently it’s ranked 6th) and rise as high as $275 in November alone.
What is driving the Solana gains?
Many factors are at play when trying to explain the meteoric rise of Solana in 2021. Hitting an all-time high of $12.7 billion in TVL has really only resulted from all the groundwork Solana laid throughout the year. First, there is the fact that Sam Bankman-Fried is a public backer of Solana and heavily invested in the blockchain via his Alameda Research crypto hedge fund. SBF, as he is commonly known in the blockchain space, built his own cryptocurrency exchange on Solana, attributing it to the fast transaction speeds and low latency the blockchain offers. That has resulted in Solana getting a lot of exposure and positive PR on social media channels, sparking an influx in developers.
Second, Solana provides a technologically sound solution to the scaling problems Ethereum is facing. Although it lags behind Ethereum in terms of developers (and no other chain really comes close to Ethereum), it has proven to be a retail favorite thanks to its usability and practically non-existent gas fees. Though Solana has had to battle the odd security issue, its rise in popularity has sparked an emergence of decentralised finance and NFT projects of Solana, both of which contributed to the stellar rise in total value lacked.
Where does Solana go from here?
DeFi Llama recorded the current TVl record on October 21, surpassing the $12.2 billion record set in September. While the previous record followed an exponential rise in the use of DeFi on Solana, the current growing interest is probably due to Marinade Finance (MNDE). MNDE has seen a 69% surge in TVl over the last week, ranking now between the top four projects on Solana in that metric. Only Sunny, Raydium, and Saber have more.
That bodes well for Solana, which is targeting a strong finish to a stellar year. Even though getting the exact price right is an impossible feat, many analysts predict Solana to finish in the top five and establish itself as the main Ethereum challenger for 2022. Much, of course, will depend on the influx of money in the crypto market overall and how much of the investments in Bitcoin trickles down to altcoins like Solana. The purple-and-black branded blockchain has much to feel good about before a possible market top in the final months of the year.
