Solana’s Recent Surge: Following Bitcoin’s Trend or Driven by Unique Factors?
In the cryptocurrency world, Solana’s token, SOL, has recently surged by an impressive 20%. This surge, which occurred between September 28 and yesterday, has raised questions about whether it’s following Bitcoin’s trends or driven by its unique factors.
Before this price jump, SOL went through a rocky period due to a U.S. court approving the sale of $1.3 billion worth of SOL from the troubled FTX exchange. However, as the FTX situation settled, several factors contributed to SOL’s recovery, including network upgrades and increased activity in decentralized applications (DApps) and non-fungible tokens (NFTs).
- The sale of FTX assets will happen in weekly batches under the supervision of an investment adviser, following predefined rules.
- SOL held above the $20 support level on September 29, 2023, coinciding with a successful network upgrade to version 1.16.
- SOL’s rally was also boosted by the increasing use of decentralized applications (DApps) and rising volumes of non-fungible tokens (NFTs) on the Solana network.
Solana’s DApp and NFT Markets Experience Surge
When evaluating networks that focus on running DApps, the number of active users is crucial. Solana has seen a significant surge in DApp activity across various sectors, including NFT marketplaces, decentralized finance, collectibles, social apps, and gaming. Notably, Solana had more active addresses using DApps than Ethereum during the same period, reaching 55,230.
Solana’s success in the NFT market is thanks to its cost-effective and scalable approach, which involves data compression and off-chain storage. This strategy lowers minting fees, allowing creators to reach a broader audience.
- Solana outperformed Polygon in NFT sales, totaling $6.8 million in value, according to CryptoSlam.
- Solana achieved $23.9 million while the Polygon network reached $31 million in NFT sales in September.
Network Upgrade Improves Privacy and Efficiency
SOL’s recent price boost may be attributed to the network upgrade to version 1.16 on September 28, 2023. This upgrade introduced a “gate system” to gradually activate new network features, ensuring stability and avoiding sudden changes. Another significant addition is “confidential transfers,” which use encryption to protect transaction details and enhance user privacy. The update also includes better RAM usage for validators, resizable data accounts, and a mechanism to detect corrupted data. In summary, this upgrade represents a major step in improving the Solana blockchain, making it more efficient, private, and secure.
SOL Faces Tough Competition from Ethereum Layer-2 Solutions
Despite its advancements in privacy, scaling, and security, Solana faces stiff competition from Ethereum’s layer-2 solutions, which have more total value locked (TVL) and activity. For instance, Arbitrum has $1.73 billion in TVL, and Optimism has $637 million, compared to Solana’s $326 million in TVL.
Solana’s Unstaked Tokens Raise Questions Amidst SBF Trial
Solana recently made headlines as 17.6 million SOL tokens were unstaked during epoch 512 on October 5, 2023. While this has sparked speculation, it’s important to note that unstaking doesn’t guarantee an immediate sell-off.
Among the unstaked tokens, 7 million SOL can be traced back to venture capital firm a16z. The mystery deepens as two other accounts unstaked 4.5 million and 3 million SOL tokens, fueling speculation about their origins. Some theories suggest connections to Alameda Research or the FTX estate.
With Sam Bankman-Fried’s (SBF) trial on the horizon, there’s heightened curiosity about the potential impact on these tokens and the market. While their fate remains uncertain, they serve as a reminder of the ever-evolving nature of the cryptocurrency market, where every move can have significant implications.
In the last 24 hours, SOL’s price increased by 1.4%, reaching $23.53, as reported by CoinStats, a cryptocurrency price tracking website.
SOL not only saw gains against the US Dollar in the last 24 hours but also showed a 0.48% increase in value against Bitcoin (BTC). As a result, 1 SOL token was valued at approximately 0.00084122 BTC.