1. Solana’s Recent Price Movement
Solana’s SOL token experienced a notable recovery, witnessing a 20% gain between Sept. 28 and Oct. 6, reaching $23. The crypto community is curious whether this surge is a response to Bitcoin’s movement or if other factors are at play.
2. Impact of FTX Bankruptcy and Recovery
Prior to the breakout, SOL faced turbulence after a U.S. court approved the sale of $1.3 billion in SOL from the bankrupt exchange FTX. Despite the initial dip to $17.34 on Sept. 11, confidence among bulls grew as SOL reestablished the $20 support on Sept. 29. A successful upgrade to version 1.16 also boosted SOL by 16% over the next seven days.
3. Solana’s DApp and NFT Market Activity
Solana’s rally was supported by the growth in decentralized applications (DApps) and increased nonfungible token (NFT) volumes on the platform. The network’s active addresses engaging with DApps exceeded those of Ethereum, making it a significant player in the NFT market. Solana’s cost-efficient and scalable solution has made it a preferred choice for creators, leading to significant sales figures.
- Consistent growth in all sectors, including NFT marketplaces, decentralized finance, collectibles, social, and gaming.
- Solana’s active addresses engaging with DApps surpassed those of Ethereum, reaching 55,230.
- Solana surpassed Polygon in NFT sales, accumulating $6.8 million in value over the past seven days.
4. Network Upgrade and Enhanced Features
Solana’s recent 20% price gain was influenced by the network upgrade to version 1.16 on Sept. 28. This update introduced a “gate system” for gradual feature activation, ensuring network stability. Confidential transfers using zero-knowledge proofs enhance user privacy, while improvements in RAM usage for validators and resizable data accounts enhance efficiency and security.
5. Stiff Competition from Ethereum Layer-2 Solutions
Despite Solana’s progress in privacy, scaling, and security, Ethereum layer-2 solutions such as Arbitrum and Optimism have gained more traction in terms of total value locked and activity. Arbitrum holds $1.73 billion in TVL, and Optimism holds $637 million, both surpassing Solana’s $326 million.
While Solana faces challenges in breaching the $23 resistance, investors continue to focus on the Ethereum ecosystem, which leads in terms of developers and consolidated decentralized applications.
