Throughout August, Solana’s cost quadrupled, making it the most valuable cryptocurrency. A months after it started at $36 each, it had reached $100. A total market capitalization of $54.7 billion has made it the 7th largest cryptocurrency.
Solana’s rapid development is a mystery.
Decentralized programs made by programmers on a blockchain like NFT are called DeFi or NFT platforms. Using a DeFi platform, crypto money may be pooled and made accessible for use by crypto lenders. Art, music, and poetry can be NFTs and exchanged on the NFT platform that hosts them. Smart contracts, on the other hand, are computer programs that replicate the terms of a signed contract. It is impossible to update the software application once it is housed on a blockchain network since no one has the technological ability to do so. This month, the DeFi initiatives of Javier Solana surpassed the $3 billion mark. Once again, Solana has proven that it can compete with Ethereum on a level playing field. The most DeFi and NFT projects are currently hosted on Ethereum.
As institutional interest in Solana has grown recently, it’s possible that this has led to the recent surge in investor enthusiasm. New deals with Hacken Foundation and Gate.io were signed by Solana. In order to include Solana in their individual offerings, Osprey Funds and Grayscale are engaged in a competition. According to the Securities and Exchange Commission, Osprey Funds has indeed set up an account for the Osprey Solana Trust (SEC).
In comparison to other networks, where does Solana rank?
Buyers’ preference for blockchains with smart contract capabilities is one reason for Solana’s positive run on the industry. The blockchains of Terra, Cardano, and Polkadot have all seen big rises in the last month. They’re all dubbed “Ethereum Killers” for their ability to take on Ethereum and its smart contracts. Ethereum 2.0, a major update planned for the coming year, is already underway.
The ‘Proof of Stake’ network will replace Ethereum’s ‘Proof of Work’ network, resulting in faster transaction times and reduced costs. “Proof of History” and “Proof of Stake” are two methods used by Solana to ensure the integrity of the network.
The Layer-1 blockchains, as opposed to Layer-2 blockchains like Polygon, which were constructed on Ethereum. As comparison to Ethereum, each of them provides quicker operations at cheaper rates with more flexibility. Layer-1 can compete with Ethereum, but Ethereum-based Layer-2 networks may actually wind up expanding Ethereum rather than battling with it. DeFi and NFT are the emerging horizons of development in the blockchain ecosystem. It appears like Solana’s prospects are being well received by traders.
There appears to be a shift away from main currencies and toward these alternate coins among investors. Investing in other cryptocurrencies is on the rise, according to a new analysis from CoinShares, which shows that investors are progressively selling their bitcoin holdings. While Bitcoin lost $2.8 billion in the week ending August 20, Solana witnessed $7 million in investment gains. On August 31, Solana began a five-week Ignition Hackathon that would focus on DeFi, Gaming, NFT, and the Web 3.0. – It should not take long for Solana to overtake Doge as the 7th biggest currency, according to analysts. Doge is worth approximately $39.5 billion, making it a meme currency.
What will the future bring?
As the popularity of DeFi grows, so does Solana’s and NFT’s competitiveness in this market. Cardano, which has risen to third place in the crypto rankings, plans to launch smart contracts later this month. DeFi and NFT initiatives have a long way to go before they can compete with Ethereum, but the network is making required modifications to keep up.
Officials are becoming increasingly concerned about DeFi’s expanding business volumes, and they are preparing to control this market. It has recently been stated that DeFi is not exempt from regulation by the Securities and Exchange Commission (SEC). Blockchain analytics startup AnChain.AI has been hired by the government to assist in its investigation of DeFi operations.
Greater use instances of a blockchain system and growing regulatory scrutiny are the two most recent trends to emerge in this field. Cryptocurrencies’ future as an asset or exchange seems bright in light of these two breakthroughs. It’s also possible that their networks will speed up the growth of the technology they support.