Solana, the blockchain competitor of Ethereum that’s tied to billionaire crypto executive Sam Bankman-Fried, saw the price of its native token SOL soar to record highs on Monday.
Under the umbrella of Alameda Research, Bankman-Fried — known in the cryptoverse as SBF — developed the crypto exchange FTX and the decentralized finance project Serum, which claims to bring unprecedented speed and low transaction costs on the Solana blockchain, an independent blockchain with its own smart contracts and native crypto, SOL.
SOL was launched by the Solana Foundation in March 2020, in Geneva, shortly after raising $1.76 million in a public token auction hosted on CoinList. It is designed to facilitate decentralized app (DApp) creations.
Here are five things to know.
Solana is a project dedicated to solving the blockchain trilemma, according to Yahoo Finance. It wants to build a scalable network that is much faster than any existing blockchain.
It relies on a unique combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms, according to Deepstash. Proof-of-history is the main component of the Solana protocol. PoH records successful operations and the time that has passed between them, thus ensuring the trustless nature of the blockchain.
The SOL exchange rate rose as high as $75.155 in the past 24 hours on the Binance exchange — a 41-percent-plus spike — after traders assessed a rash of infrastructure developments in the Solana ecosystem. A recent $70-million crowdfund supported Solana’s blockchain-powered decentralized exchange, Mango Markets, Cointelegraph reported.
Solana was trading at $65.57 as of this writing.
Mango provides a platform for spot markets, lending and perpetual futures. It sources liquidity from its native pools and Serum, another Solana blockchain-based exchange backed by Bankman-Fried’s FTX.
The working model is very similar to other successful, Ethereum-based decentralized exchanges such as Uniswap and SushiSwap, according to Cointelegraph.
Wormhole, a communication bridge between Solana and other top decentralized finance projects, launched Aug. 9. Wormhole allows tokens to be moved between Ethereum and Solana. DeFi platforms can leverage Solana for high speed, low-cost transactions, while still allowing for settlement on another base chain. The bridge goes to Terra, Ethereum and Binance Smart Chain, and, over the weekend, the SOL-powered sales of the Degenerate Ape Project’s 10,000 nonfungible tokens (NFT).
“The very first day has already had over 200k SOL traded not even 24 hours in,” market analyst Pentoshi tweeted on the NFT sale on Solana marketplace Solanart.
The Solana bull run appeared as gains slowed down in top cryptocurrencies Bitcoin and Ether, which are saddled with overvaluation risks and showing signs that traders think they are overbought.
“Meanwhile, alternative cryptocurrencies picked up their upside momentum in the wake of Bitcoin’s and Ether’s flat price action,” Yashu Gola wrote for Cointelegraph.
For example, Solana gained 57 percent in the last week or so, as did XRP. No. 1 Ethereum rival Cardano reported a 47 percent surge while meme coin Dogecoin spiked 34 percent with new Elon Musk and Mark Cuban endorsements.
“But like Bitcoin and Ether, Solana now appears to be facing the same overvaluation risks,” Gola wrote.
In July, the Switzerland-based Solana Foundation announced the launch of a $5 million Creators Fund to bring creators and fans onto its crypto networks. The foundation claims to be dedicated to the decentralization, growth, and security of the Solana network and aims to make the protocol censorship-resistant.
The fund is focused on musicians and artists who are experimenting with projects on music streaming service Audius, non-fungible token (NFT) marketplace Metaplex and other decentralized platforms built on top of Solana.
The foundation says it wants to help creators pioneer new works in music streaming, NFTs, and The Metaverse, create new fan experiences using permissionless software, and spur innovation around creator-first business models. It says it will back visual artists, musicians, video producers, digital artists, performance artists, streamers, gamers, and creators who are actively innovating and rewriting the rules of conventional wisdom for their field. In addition to capital, it says it will give technical support to creators who need help using crypto, token models and other monetization tools.
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