Solana's native cryptocurrency (SOL) has continued soaring to new heights, setting consecutive all-time high prices. A week ago, SOL's price was just below $40 and has since risen 95% to its new all-time high. The past all-time high was in May at $56 before the wider cryptocurrency market came crashing down, causing SOL to fall to just under $20. SOL hit a more recent low, sitting just under $24 less than a month ago, on July 20. The price of SOL is currently sitting at $73.44 which means for the month of August it is up 118%.
Since the last article we did on Solana and its ecosystem, titled 'The Big Four: Smart Contract Platforms', we have seen more developers take advantage of the current benefits provided by Solana. Most notably, its higher volume of transactions (about 2,000 times more transactions per second compared to Ethereum) and lower transaction fees compared to Ethereum. This has led to an explosion in growth of Solana's ecosystem, with over 300 projects currently being built on Solana. The following chart visualises the vast variety of projects operating under the Solana ecosystem.
Solana's native cryptocurrency (SOL) is used for transaction fees on the network when sending or receiving tokens or interacting with protocols built on Solana such as DEXs (Decentralised exchanges) or other DApps (Decentralised Applications). As a part of the blockchain's infrastructure, the network started by burning 100% of all fees from transactions and plans to decrease this 50%, thus enabling a lasting deflationary pressure on the token. This deflationary mechanism can also be used for security reasons as it should incentivise holders to stake more of their $SOL tokens increasing network security and the overall efficiency of the network. These are very similar to the changes implemented with Ethereum's London Hardfork and more specifically the addition of EIP1559 adding deflationary pressure on ETH.
The recent SOL all-time high was partly on the back of the launch of an NFT collection called Degenerate Ape Academy. An NFT acts as a collector's item that can't be duplicated, and Ethereum-based collections such as CryptoPunks and Bored Ape Yacht Club have seen an unprecedented surge in demand in recent weeks. For more information on NFTs, definitely check out our previous article here: 'NFTs Fueling Mainstream Crypto Adoption'.
The Degenerate Apes launch of 10,000 unique and flashy pictures of animated apes sold out in just 8 minutes, with the overall trading volume peaking at almost 96,000 SOL ($6.7 million). The highest price sold for a degenerate ape is currently 1,500 SOL ($10,500) and the highest listed price is currently 100,001 SOL ($7 million).
Other than NFTs, the explosion in SOL's price can also be attributed to the Solana-based DeFi applications which has surpassed $2.2 Billion locked in the space, according to DeFiLlama. This is still a small fraction of the nearly $80 Billion locked in Ethereum DeFi contracts, but Solana DeFi is definitely one to watch out for.
Solana has even begun attracting projects originally built on the Ethereum Network to migrate their services over to Solana. PowerLedger is an example of this exact migration. PowerLedger decided to build its Powerledger Energy Blockchain to run on the Solana Network instead of Ethereum so it can utilise Solana's faster and cheaper fess, stating that "Solana provides us with the flexibility of short block times of 400 milliseconds and fast throughput of more than 50,000 transactions per second".
Further, Audius a decentralised music streaming service similar to Spotify or Soundcloud has also attracted some major attention. The project that is built on Solana announced a major partnership with the social media platform Tiktok. Artists will now be able to upload their music directly from Audius to Tiktok, allowing creators to make videos with the artist's songs included. The artists will then be able to link their songs on Tiktok directly back to Audius giving them far greater exposure.
Amidst the action-packed week surrounding Solana, the developers have also announced Solana Breakpoint, the first annual conference around the ecosystem. It will take place in Lisbon, Portugal on November 7-10, although the dates are subject to change due to COVID-19 restrictions. An exciting time for the Solana ecosystem with much more in-store as we move through the rest of 2021.