Solana, a competitor to Ethereum, climbs to seventh place in the top ten largest virtual currency

The cryptocurrency associated with the Solana network has risen to seventh place among the world's top ten largest virtual coins on the back of optimism that the blockchain might become a long-term rival to ethereum.

Sol tokens issued by Solana have more than tripled in value over the last three weeks, reaching a market cap of more than $41 billion, according to CoinGecko. Proponents emphasise the alleged speed and lower cost of transactions on Solana for decentralised finance and digital collectibles, two applications where ethereum now reigns supreme.

“Solana has a thriving ecosystem, projects are being developed on it, and it has benefited significantly from the NFT mania,” Antoni Trenchev, co-founder of crypto lender Nexo, wrote in an e-mail. NFTs are irreversible tokens that are used to trade digital collectibles. He cited the support of crypto luminary Sam Bankman-Fried, CEO of crypto exchange FTX.

Solana bills itself as the world's fastest blockchain, with an average transaction fee of $0.00025, according to its website. In June, it announced a $314 million funding round led by Bankman-Alameda Fried's Research, venture capital firm Andreessen Horowitz, blockchain startup Polychain Capital, and CoinShares.

“Major companies in the space, including as FTX and Jump, are seeing its potential,” Alexandra Clark, sales trader at GlobalBlock, a UK-based digital asset dealer, wrote in an e-mail on Monday. “Not only that, but the network's debut into NFTs with Solanart, the marketplace based on the SOL blockchain, has played a significant role in driving the altcoin's price higher,” she added. “The present increase in Sol's price is likely to continue.”

Late in August, Jump Trading-affiliated crypto market data service Pyth Network launched on Solana's mainnet, a move that is likely to enhance the field of decentralised finance. There are plans to enable it to transmit market data over the so-called Wormhole Network in the near future.

“It's growing too large to ignore and provides a viable alternative to ethereum's smart contract solution,” Jonathan Cheesman, head of over-the-counter and institutional sales at FTX, wrote in an e-mail.

So-called alternative coins such as the Sols, Cardano's ADA, and Binance Coin have soared in recent weeks, stealing some of the spotlight away from top tokens bitcoin and Ether as part of a wider crypto rebound following a May crash. Bitcoin has also increased in value and came dangerously near to $52,000 on Monday.

Skeptics contend that the technological advancements pushing some tokens may not justify the rally's size.

Support us!