Often referred to as the Ethereum Killer by many analysts and experts, Solana has surged more than 17,500 per cent in 2021, making it the fourth largest cryptocurrency by market capitalisation. Thanks to its secular rally, Solana can brag about having a market cap of close to $75 billion, racing past the largest stablecoin Tether, whose market cap is a little above $72.5 billion.
Solana has risen to highs of $258 from merely $1.5 levels at the beginning of the year. The digital token would have turned an investment of Rs 1,000 into Rs 1.75 lakh in a little more than 10 months.
Launched in April 2020, the digital token has soared about 35,000 per cent from $0.75 back then. It saw a rally of over 750 per cent since May 2021. The sharp rally was caused by the pace at which Solana has grown, and its investors and backers, which include a few billionaires, said Ishan Arora, Partner, Tykhe Block Ventures. “It’s a fast blockchain with many projects building on it.”
Ethereum and Solana are often compared with one another as both have smart contract capabilities. Also, Solana is more quicker and efficient compared to its behemoth counterpart. Smart contracts, a collection of codes that carry out a set of instructions on the blockchain, are crucial in running decentralised finance (DeFi) applications and non-fungible tokens, or NFTs.
“As a cost-efficient and scalable alternative to Ethereum, Solana can handle 50,000 transactions per second,” said Sharat Chandra, a Blockchain & Emerging Tech Evangelist. “It has become a default protocol of choice for DeFi & NFT projects. Solana prices will continue to head north on account of massive developer activity.”
Market experts see more upside in Solana as the digital token has good potential in the mid to long term. Arora of Tykhe Block Ventures said the projects being built on it are getting launched now.
However, it is too early to comment if Solana will dethrone Ethereum. The second largest cryptocurrency commands a market cap of more than half a trillion — more than 7 times higher than Solana. Ethereum is commanding a market cap of little less than $560 billion, which is nearly 20 per cent of overall market capitalisation of the entire crypto market cap.
Market experts said Solana could dethrone Ethereum in the long term. “Solana should be able to strengthen its developer community. It should be able to attract more developers to build decentralised applications on the network. We will have to wait and watch if Solana can dethrone Ethereum over a period of time,” a CoinSwitch Kuber spokesperson said.