Solana is a modern high-performance blockchain that uses a combination of mechanisms for a high transaction throughput and low fees. The two consensus mechanisms are proof-of-stake (PoS) and proof-of-history that allows blockchain networks to quickly complete transactions. Recently, Solana (Sol) has experienced an increase in its prices. Below are a few factors that are fueling this meteoric rise in the SOL to USD exchange rate.
Promising ‘Decentralized Finance’ Future
One of the primary factors surging the price of Solana in the market is its promising DeFi future. Solana has taken over Etherium by focusing on smart contracts. Smart contracts are blockchain programs that run when certain predetermined conditions are met.
Solana also outperforms Ethereum in transaction price and speed. It boasts a speed of 50,000 TPS under $0.01 per transaction while Ethereum has a speed of less than 10,000 TPS. This makes it one of the fastest cryptos with comparably low prices.
NFT Frenzy With Degenerate Apes
Non-fungible tokens (NFTs) are special cryptographic tokens that represent digital or real-world items like art, music or virtual real estate. Solana’s scalability and fast performance has allowed for a seamless NFT creation and efficient minting and trading.
Degenerate Apes was Solana’s first foray into non-fungible tokens, featuring a wide array of traits from glasses to sandwiches. While its launch faced technical difficulties, about 10,000 Apes collections managed to sell in under 10 minutes and have so far sold over $66 million. This price increase wouldn’t have happened without SOL.
Successfully Initiated a Wormhole Project
Solana’s Wormhole is a decentralized, universal bridge that connects multiple blockchains. It allows blockchains to communicate with each other:
- Solana
- Ethereum
- Polygon
- Terra
- Binance Smart Chain
- Avalanche
- Oasis
These blockchains can now move assets between them quickly and at lower costs.
Attract Interests from Developers and Projects
Solana has high technical abilities such as high throughput and low transaction fees that make it easier for developers and projects to easily build fast and cost-efficient decentralized apps (DApps).
As a result there has been a rise of vibrant projects across different industries, from DeFi to NFTs and gaming. The more the apps built on Solana, the higher the network’s adoption and use, leading to an increased demand for SOL. The increase in demand eventually appreciates its prices in the market.
Cheap and Fast Ethereum Alternative
Ethereum was the first blockchain that could handle applications and cryptocurrencies. Most of these applications are still built on Ethereum and are facing congestion and overcharging. These challenges are pushing developers and investors to look for affordable alternatives.
Solana is among the best blockchains jostling for top position. As a result, its high demand among developers and investors is driving the dramatic profits in its pricing.
Endnote
If you’re an investor or a crypto enthusiast, it’s critical to understand the factors that affect SOL in USD. The above factors play an integral role in Solana’s price appreciation. It’s also important to monitor Solana’s roadmap and consider expert opinion for invaluable insights in its future performance. Do thorough research before making any financial investment decision.
