September has been hectic for the world of cryptocurrencies. It has a clear protagonist, which is capturing the attention of investors. For the general public, it raises questions about what it is and how it differs from other cryptocurrencies such as Ethereum, the Cardano startup, or the consolidated Bitcoin.
We are talking about Solana. With about 18 months of life, this token has risen 8,600% in 2021, sneaking into the top 10 cryptocurrencies. Solana has about $50 billion in market capitalization and a price that points directly to $200 in the medium term.
Solana has been the cryptocurrency that has grown the most so far this year. In August alone, it has increased by 400%. As many analysts point out, its blockchain technology could surpass Ethereum in the long term, which has placed it in the seventh position of the most valued cryptocurrencies.
NFT’s growth behind Solana
Blockchain is a decentralized accounting technology that serves as a tracker for those who own digital assets. For this reason, when minting an NFT token or processing transactions, they must charge a fee.
Today almost all NFT-related transactions are conducted on the Ethereum network. That has a direct impact on gas fees when there is a high number of transactions. In fact, according to EtherScan, it reached the highest levels of Ethereum gas fees in recent months.
Solana’s innovation in this regard has to do with eliminating the bottleneck that Ethereum is causing due to its low performance. Moreover, Solana’s prospects of lower gas tariffs promise to make it a desirable alternative for the NFT industry. In this market, Solana is entering the big time with digital collectibles such as Solanart, DigitalEyes, and Audius, with its recent integration into this music streaming platform.
Industry experts are pointing out that Solana’s potential is enormous compared to Ethereum’s transactional capability. One proof of this is the support they are receiving from investors. Last June, Solana received $314 million in a funding round backed by Andreessen Horowitz, Polychain Capital and CoinShares.
Solana’s ultimate boom
The secret behind Solana’s ongoing success is the growth potential it can bring to the DeFi (decentralized finance) ecosystem and the NFT space. Its growth is reminiscent of what Ethereum and Binance Smart Chain experienced back in the day. Many point to the SOL/USD exchange rate, potentially reaching $500 by the end of the year.
However, not all voices are so optimistic. To concoct the counterpart to these expectations, analysts at JPMorgan & Chase warn that the NFT and altcoin space may be suffering from overvaluation due to overly optimistic expectations.
Solana was undoubtedly born to be a viable alternative to the Ethereum network, a goal it is certainly achieving. The network of this digital currency is high-speed and very efficient compared to other blockchain networks. It is laying the foundations for a future of much faster blockchain transactions, making it very attractive for the NFT market overall.