The growing demand for Ethereum has triggered a rally in its biggest competitor (even if according to an analyst, it would not be SOL), Solana, who offered a spectacular rally in the current calendar year.
An off-scale increase
Often referred to as the Ethereum Killer by many analysts and experts, Solana grew more than 17.500% in 2021 to become the fourth largest cryptocurrency by market capitalization. Thanks to its centuries-old rally, Solana can boast of having a market capitalization of nearly $ 75 billion, surpassing the largest stablecoin Tether, whose market capitalization is just over $ 72,5 billion.
Solana rose to highs of $ 258 from just $ 1,5 at the start of the year. Launched in April 2020, the digital token is up about 35.000 percent from $ 0,75 back then. It has seen a rally of more than 750% since May 2021. The strong rally was caused by the pace at which Solana and her investors and supporters, including some billionaires, have grown, said Ishan Arora, Partner, Tykhe Block Ventures. "It's a fast blockchain with a lot of projects based on it."
Ethereum and Solana are often compared with each other as they both have smart contract capabilities. Additionally, Solana is faster and more efficient than her behemoth counterpart. Smart contracts, a collection of code that executes a series of instructions on the blockchain, are crucial in running decentralized finance (DeFi) applications and non-fungible tokens, or NFTs.
"As a cost-effective and scalable alternative to Ethereum, Solana can handle 50.000 transactions per second," said Sharat Chandra, Blockchain & Emerging Tech Evangelist. “It has become a default protocol of choice for DeFi and NFT projects. Solana's prices will continue to head north due to massive development activity ”.
There will be overtaking, but only in the long term
Market experts see more benefits in Solana as the digital token has good potential in the medium and long term. Arora of Tykhe Block Ventures said ongoing projects on it are being launched now.
However, it is too early to comment on whether Solana will detain Ethereum. The second largest cryptocurrency has a market capitalization of over half a trillion, more than 7 times the size of Solana. Ethereum has a market cap of just under $ 560 billion, which is nearly 20% of the overall market cap of the entire cryptocurrency market cap.
Market experts have said that Solana could dethrone Ethereum in the long run. “Solana should be able to strengthen its developer community. It should be able to attract more developers to build decentralized applications on the network. We will have to wait and see if Solana can dethrone Ethereum for a period of time, ”a spokesperson for CoinSwitch Kuber said.
