The arrival of institutional investors and the rise of decentralized finance (DeFi) has been an incredible boon for the entire cryptocurrency sector but it has also highlighted a number of persistent limitations that many blockchain networks encounter when faced with surges in activity and the need to scale.
High fees and slower transaction times on the Ethereum (ETH) network have left the door open for new layer-1 solutions to emerge, and Solana (SOL) is one such project that has been gaining traction lately.
Data from Cointelegraph Markets and TradingView shows that the price of SOL has increased 195% over the past month, rallying from a low of $12.19 on March 26 to a new all-time high of $36.10 on April 19th on a record $1.4 billion in trading volume.
Similar to how Ethereum rose to prominence in 2017, Solana's strong performance in the past month was sparked by the launch of multiple projects on the SOL blockchain with everything from legitimate DeFi protocols to pump and dump airdrops that brought speculators to Solana's exchange.
Amazed by the growth of @solana ecosystem.
Looking forward to seeing @mangomarkets @PsyOptions @staratlas
And congratulations to @mangomarkets , what’s an outstanding dex experience on mainnet-beta pic.twitter.com/Ewr8VbM4VG
— Solanians ☀️ (@solanians_) March 23, 2021
Fast transactions and low fees entice developers
One of the biggest draws for the Solana network is its claim of being able to process 65,500 transactions per second (TPS), which is significantly faster than Ethereum’s current average of 18.3.
The network’s ability to handle a larger load has also made the platform a cross-chain destination for projects like Civic (CVC) and the popular stablecoins USD Coin (USDC) and Tether (USDT).
DeFi platforms like Raydium and Serum have launched on Solana and there is a growing list of projects in the process of transitioning to the network.
Prospects for the network received another boost in early April when the Solana-based Sollet wallet released its Chrome extension that offers the Solana ecosystem functionality that mirrors the way MetaMask works for Ethereum.
Simple yield opportunities attract DeFi users
The Solana protocol utilizes a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain, which makes it easy for token holders to earn a yield on their SOL tokens while also participating in the network.
The number of cryptocurrency wallets supporting SOL is also a sign that the project is garnering more attention. To date, Exodus, Ledger and Blockfolio are some of the more prominent wallets that offer support for the token.
Preparing for the rise of @solana
Top wallets support SPL token in the ecosystem pic.twitter.com/3b2kmvUCwJ
— Solanians ☀️ (@solanians_) April 8, 2021
A recent integration with the Phantom wallet has also brought fresh energy to the project as it will enable the creation of a robust NFT ecosystem on Solana. This brings one of the hottest sectors of the crypto market to the network.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.