“Ethereum killer” Solana climbed the Bitcoin wave and rose 8% in a single day, locking in a record high of $12.7 billion in total value
After Bitcoin and Ethereum hit record highs this week, the smart contract blockchain Solana is slowly returning to its all-time high.
According to data from the comparison terminal, SOL is the sixth-largest cryptocurrency by market capitalization. It has risen 27% in the past week and has risen more than 8% in the past 24 hours, returning back to the record area just set last month. It is now trading at $186.54, which is 12% lower than the all-time high of $213.47 set on September 9.
This can be attributed in large part to Solana's pursuit of a larger decentralized finance (DeFi) market, which originated with Ethereum. DeFi refers to a protocol built on blockchain that allows people to put their cryptocurrencies to use without going through a third party. They can take loans, earn interest, exchange tokens, or perform other financial transactions.
Just today, the total value of Solana locked on the network reached a record $12.7 billion. The indicator looks at how much money is flowing on Solana-based platforms. This number affects the price of SOL. Just as you need arcade tokens to play Pac-Man, Rampage, or Donkey Kong, you also need SOL to take advantage of its DeFi ecosystem.
Solana's value proposition is that it's faster than Ethereum, which can process around 15 transactions per second. Solana has reached industry-leading speeds, processing 65,000 transactions per second
This is partly because Ethereum was designed without specific use cases in mind, and Vitalik Buterin wanted to allow a wide range of applications to take root on the network. In contrast, Solana focused on DeFi from the beginning and was designed to handle the necessary transaction load to speed up the operation of decentralized finance.
Of course, this requires a balance. Ethereum is still a more decentralized network in terms of the number of machines connected to the network; this is a good thing from a security perspective. Last month, Solana experienced a massive network outage due to issues with the network validator, which suggests that its high prices and low transaction costs could be costly.
In Solana, nodes can create their own timestamps and send them to other nodes that can quickly verify their accuracy. So you don't have to wait for all these confirmations before continuing.
Because Solana is so fast and scalable, they don't require any sharding or second-tier solutions Ethereum requires.
This is a huge benefit because it's much simpler for developers to build directly at the top level rather than dealing with different shards or integrating with second-tier solutions.
You need talented developers to build valuable apps on your blockchain for long-term success.
But at this point, Solana has made some strange decisions that may prevent it from attracting as many developers as possible. For example, you need to write smart contracts in the Rust programming language, but not many developers know Rust.
Another obstacle is that Solana's smart contracts aren't EVM compatible, which means that all DAB on the Ethereum network can't be easily transferred.
Another important statement is that Solana has solved the blockchain trilemma.
The blockchain trilemma is a concept where you have to make some trade-offs when it comes to the security, speed, and decentralization of any given blockchain.
The idea is that you have to choose two and then sacrifice the third one.
Some people choose speed and security over decentralization, while others prefer a different mix. But Solana claims to be fast, secure, and decentralized at the same time.
Of course, Solana is fast and secure. It's undisputed, but critics say it's not decentralized. Because you need expensive hardware that costs thousands of dollars to become a validator or block producer.
The image above is an eco-map recently published by Solana. As can be seen from the chart, there are currently not many Solana ecosystem projects, but most of them are focused on infrastructure, and the applications are mainly based on mature external applications, and there are still relatively few local Solana-based apps. Overall, although the current infrastructure of the Solana ecosystem is not very complete, it has been able to support the normal development of the Solana ecosystem. There are many types of native projects on Solana. Among them, the trading sector has the largest number of projects and is quite mature.
Earlier this year, Solana raised more than $300 million to help launch its crypto incubation studio, which aims to accelerate the development of blockchain-based decentralized applications and platforms. In addition to this, Solana is also planning to set up a venture capital division and trading platform dedicated to the Solana ecosystem.
Author: Amy Liu
Picture Source: Internet
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