Solana (SOL) Market Price Overturns XRP – What’s Behind The Price Increase?
Solana's native token SOL (SOL) rose 13.8% on December 20, surpassing $82 for the first time since May 2022. Capitalization makes it the fourth largest cryptocurrency without the first stablecoin.
Is Ethereum the Next Advocate for Solana's Growing Demand?
In particular, some analysts are questioning the ability of Ethereum Ether (ETH) to maintain its leadership, given that the Solana network offers cheaper and faster transactions.
For this, it may be burned on fire
Solana's motivation and @solanamobile's importance in this future cannot be denied
The shitcoining UX on Solana is better than Wannet or any other L2 arn. New users -> Solana
Pressure is on the Ethereum ecosystem.
— Evans6 (@Evan_ss6) December 15, 2023
In a post on X (formerly Twitter), trader Evans6 explained that Solana's focus on mobile accessibility is what crypto projects need to attract new users. ” Basically, if the project requires high processing capacity or simply benefits from low transaction costs, Solana's user experience is superior to its competitors, especially token and non-vulnerable token (NFT) startups.
Several factors contribute to this price increase, from increased network activity to the rapid success of the Solana SPL token. However, a more comprehensive analysis is needed to determine whether the current assessment is correct and whether a rally above $100 is truly possible.
The current SOL price rally is partially supported by the frenzy of airdrops that caused the Solana Saga phone to be completely sold out and traded on secondary markets.
Solana On December 7, major centralized exchanges listed the newly launched SPL token JITO, a token based on the Ethereum Lido-inspired Jito Liquid Staking Protocol. Gito's airdrop has resulted in impressive profits for participants, with its market capitalization surpassing $300 million in the first few hours of trading. The successful launch on Coinbase and Binance has fueled interest in other airdrops and token launches on the Solana Network.
Regarding the Solana Saga phone, a change occurred on December 14 with the listing of memecoin BONK on the Coinbase exchange. Each phone received 30 million BONK, which exceeds the price of the product by $599. Interestingly, while Solana's founder said a few weeks ago that the phone project might be sunset, other projects have rushed to join the party.
The SOL rally is powered by DApp activity.
SOL's recent rally has gone beyond memecoins, as the Solana Network's development of decentralized applications (DApps) shows. Just three weeks ago, As of November 29, Solana's Total Value Lock (TVL) stood at just $654 million, representing just 1.4% market share. That figure has now grown to $1.28 billion, a 96 percent increase, according to Defillama.
The increase in deposits on Solana's network was accompanied by activity in its decentralized applications.
It's worth noting that Solana's network size exceeds that of its main competitors. Likewise, unique active addresses connecting to Solana DApps grew to 875,250, while most rival blockchains declined over the same seven-day period.
Related: Ripple Gets License to Operate as Digital Asset Service Operator in Ireland
One could argue that Solana's recent surge in activity is mainly due to the anticipation of airdrops and token launches including Bonkwift (BIF), Rabbit (RBT), Jupiter (JUP), Mew Coin (MEOW), Phantom, Camino, Drift and many more. Others. However, by onboarding more users and increasing TVL, Solana Network is strengthening its position and attracting promising projects that can further establish its presence in the DApps industry.
Case in point, leading hardware wallet provider Trezor announced on December 20th that they will support Solana and its SPL tokens. Additionally, Binance Research released a report highlighting parallel computing on the same day, saying it increased blockchain throughput by “efficiently utilizing computing resources.” The report specifically cited Solana as an example of parallel computing.
Basically, Solana's rally to $100 seems possible as the growth of Solana's network activity is continuous and not dependent on a few airdrops and token launches. In addition, competing chains have recently experienced disruptions due to increased activity, but Solana has been able to manage the demand in no time.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
