Ethereum Rival Solana jumps to 7th place in the Top 10 of cryptocurrencies

The Solana network-linked cryptocurrency jumped to seventh in the world’s 10 largest virtual currencies amid optimism that the blockchain could be a long-term competitor to Ethereum.

Solana’s SOL token tripled in about three weeks and now has a market value of over $41 billion (about INR 2,99,640 crores), according to CoinGecko. Proponents trumpet the alleged speed and lower cost of transactions in Solana for decentralized finance and digital collections, applications where Ethereum dominates. The price of ether in India was at Rs. 2.97 lakhs from 5:30 pm IST on September 6th.

“Solana has a growing ecosystem, projects are being built on it, and it has benefited enormously from the craze that is taking place in the NFTs,” wrote Antoni Trenchev, co-founder of crypto lender Nexo, via email. NFTs are non-fungible tokens used to trade digital collectibles. He said the support of cryptographic figure Sam Bankman-Fried – chief executive of crypto exchange FTX – is helping.

Solana calls itself the fastest blockchain in the world and his website says the average cost per transaction is $0.00025 (about Rs. 0.018). In June, it announced that it had raised $314 million (about Rs. 2,290 crores) in a round of financing from investors including Bankman-Fried’s Alameda Research, venture capital firm Andreessen Horowitz, Polychain Capital and CoinShares.

Late last month, Jump Trading’s affiliate market data encryption provider, Pyth Network, went live on Solana’s core network, a development that should help strengthen the world of decentralized finance. There are plans to soon be able to transmit market data via the so-called Wormhole Network.

“It’s getting too big to ignore and offers a different smart contract solution for Ethereum,” wrote Jonathan Cheesman, head of institutional and counter sales at FTX, via email.

So-called alternative currencies, such as Solana’s SOL, Cardano’s ADA and Binance Coin, have emerged in recent weeks, taking some of the spotlight for key Bitcoin and Ether tokens in a broad cryptographic revival of a defeat in May. Bitcoin also rose and came close to $52,000 (about Rs. 38 lakhs) on Monday. The price of Cardano in India was at Rs. 216, the price of Bitcoin in India was at Rs. 39.06 lakhs from 5:30 pm IST on September 6th.

Skeptics argue that the tech updates that drive some tokens may not justify the scale of the rallies.

© 2021 Bloomberg LP

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