A crypto crash that wiped hundreds of billions of dollars from the market this week has led to fresh fears that bitcoin and its rivals could lose all the gains made in 2021.
But one leading cryptocurrency managed to not just make it through the turmoil unscathed – but actually soared to new record highs.
Solana’s SOL token hit an all-time high on Thursday, peaking at $214.96 according to CoinMarketCap’s price index. Just one year ago it was worth less than $2.
The price surge has boosted Solana’s market cap above $60 billion and pushed it ahead of both dogecoin and Ripple (XRP) this week to rank as the world’s sixth most valuable cryptocurrency.
“The majority of the crypto market slid with BTC, demonstrating the relative immaturity of the asset class and the market’s dependency on bitcoin,” said Alexandra Clark, a sales trader at UK-based digital asset broker GlobalBlock. “But Solana remained largely unaffected and instead have seen double digit returns.”
Exactly how it has managed to buck the market trend may have something to do with its underlying technology, which its backers hope could see it eventually rival the likes of Ethereum (ether) and Cardano (ada).
Solana’s developers claim it is “the fastest blockchain in the world” and “censorship-resistant”, capable of supporting smart contracts, non-fungible tokens (NFTs) and other platforms in the rapidly emerging space of decentralised finance.
There are currently more than 400 projects running on Solana’s ecosystem, while the SOL cryptocurrency sees around 1,000 transactions per second. More remarkable that the volume is the cost, with each transaction averaging just $0.00025.
One of these projects is Aldrin, a crypto exchange that merges both centralised and decentralised finance.
“Crypto will accelerate what will be the biggest social impact change of our lifetimes,” said Hisham Khan, who launched Aldrin. “Ethereum has influenced a wave of putting power back into the hands of people, but so far has been too expensive and too exclusive, simply mirroring the wealth gap we see in traditional finance. Solana is lowering the barriers of entry and furthering the mass adoption of the decentralization movement.”
Despite these comparisons with its open-source competitor Ethereum (ether), which commands a market cap second only to that of bitcoin, they are something Solana’s creators have sought to avoid.
“I hate the Eth-killer thing,” Solana Labs co-founder and CEO Anatoly Yakovenko said during a developer conference earlier this month. “I’m an open source developer.
“The big misconception that people have about open source projects is that it’s possible to kill them. There’s no way to kill Ethereum. That’s basically not something we think about.”
Beyond the actual platforms, the crypto tokens associated with them have drawn huge interest from investors and traders throughout 2021’s bull market. Price charts have made comparisons unavoidable, and none have performed better than SOL.
A 12,000 per cent price rise since the start of the year has dwarfed the gains of bitcoin (63 per cent), ether (349 per cent) and Cardano’s ada (1,360 per cent).
But rather than Ethereum comparisons and price charts, Yakovenko instead has a bolder goal of building a network that can not just rival but beat the creaking infrastructure of traditional finance.
“Literally the goal of Solana is to carry transactions as fast as news travels around the world – so speed of light through fibre. Who we’re competing with is Nasdaq and the New York Stock Exchange,” Yakovenko said.
“We are 100 per cent focused on making sure these order books that are running on [Solana’s decentralised exchange] Serum can be competitive with not Ethereum, but with the New York Stock Exchange, with NASDAQ, with the biggest retail exchanges with equities. If we can accomplish that, as a decentralized open source project... I think that’s a very interesting outcome. It’s worth trying.”