Solana cryptocurrency: what is it? Reasons for the growth? The prospects
The Solana cryptocurrency grew by 122% in August 2021, by more than 200% in three months, and by 3000% in general since the beginning of the year.
Now this digital asset occupies the seventh place by market capitalization with an indicator of $ 38 billion. What is the reason for this success and what are the future prospects of the project?
Dynamics of Solana capitalization:
Features of the Solana project
Solana is a fairly young crypto project. It was launched in 2017 by Dr. Eric Williams, developer Greg Fitzgerald and former Dropbox developer Anatoly Yakovenko.
Initially, the project was called Loom, however, to avoid analogies with the Loom Network project launched on Ethereum, on March 28, 2018, the team renamed it Solana.
The key feature of the Solana blockchain is the high speed of transactions. The throughput of the Solana network is about 50 thousand transactions per second: while Ethereum has only 10 to 15 transactions. At the same time, the commissions are quite low – about $ 0.001.
High transaction processing speed is achieved by using the Proof of History (PoH) solution, which allows you to quickly synchronize network nodes in time. This distinguishes the Solana blockchain from the Bitcoin and Ethereum networks.
The reasons for the rise of the Solana cryptocurrency?
Until the beginning of 2021, the Solana token showed sideways dynamics. However, at the beginning of this year, this cryptocurrency began to gradually grow. As a result, as of mid-September, Solana is already worth more than $ 130.
Several factors contributed to the positive dynamics of Solana quotes in recent months. In particular, in March 2021, the Block Dream Fund, which is the investment division of the OKEx cryptocurrency exchange, launched a fund that invests $ 20 million in crypto projects on the Solana blockchain.
In addition, in June 2021, they announced the attraction of funding – more than $ 300 million. However, the really rapid growth began in August.
Solana dynamics from January to September 2021 (dates of influencing factors are marked):
The reason for the August takeoff was the announcement on the project's Twitter page, in which the team announced another update, during which it will be possible to burn tokens on the network. As a result, Solana quotes reached a maximum at $ 210.
Announcement of the new Solana protocol on Twitter:
Given the successful history of attracting investors, Solana's prospects are interesting. In particular, in mid-September, it was announced that the issuer of digital assets Valor launched ETH on the Nordic Growth Market trading platform on Solana. In addition, Deutsche Boerse recently announced the launch of exchange traded notes (ETN) on Solana.
It is not too late to buy a coin, but it is worth carefully weighing the risks, since the crypto market is characterized by high volatility. Forecasts sound very different: from a complete collapse of the market to $500 per SOL by the end of the year. We recommend that you have SOL in your portfolio.
Author: Dmitry Noskov-expert of the StormGain crypto exchange (a platform for trading, exchanging and storing cryptocurrency)