Solana's Native Token SOL Sees Remarkable Surge, Up 34.5% Over the Week
Summary:
SOL, the native token for Solana, has seen a 34.5% surge in value over the past week, moving it to its highest point in nearly two years. Despite other cryptocurrencies experiencing notable growth in the same period, SOL's surge has been significant in the past week. Future trends are being watched closely, especially in relation to Solana’s Total Value Locked (TVL) in smart contracts that may impact SOL's price. Factors contributing to Solana's success could be challenges faced by other blockchains, boosting Solana DApps' user activity.
SOL (SOL), the native token for Solana, has experienced a surge in value over the past week, currently up 34.5% - its highest in almost two years. Solana now holds the fourth-largest cryptocurrency position, trailing BNB (BNB) closely in third. Still, the primary concern is to understand what led to SOL's surge, and whether its outperformance can endure over time. SOL/USD price index. Source: TradingViewDespite attempts in solidifying the $100 support for the past months, SOL's bull run hadn't officially kicked off until Feb. 23. Between Dec. 23, 2023, and Feb. 23, 2023, SOL saw only a 2% increase, whereas Ether (ETH) grew 25.5% and Tron (TRX) increased by 31.5%. Thus SOL's decoupling and surge happened in the last week. Simultaneously, several Solana SPL memecoins, including Bonk (BONK) and DogWifHat (WIF), saw substantial demand, experiencing 110% and 250% increases respectively. Popular tokens like Dogecoin (DOGE) and Shiba Inu (SHIB) also saw around 51% gains, which may have influenced SOL's surge as traders vied for significant decentralized exchange (DEX) listings. On February 27, the New York Times claimed that Sam “SBF” Bankman-Fried, the disgraced ex-CEO of the defunct FTX exchange, has been suggesting prison guards invest in Solana. His advice's timing, though uncertain, could have influenced SOL's gains. Understanding whether SOL’s recent price surge has been backed by increased demand requires observing Solana network's metrics. SOL use is essential for DEX trading, NFT marketplaces, staking solutions, and other DApps like gaming and social networks. In this ecosystem, the Total Value Locked (TVL) in Solana's smart contracts can drive SOL's price as an indicator of Solana DApps' activity and demand. Source: DefiLlamaSolana's TVL recently reached its highest since November 2022 at SOL 40.7 million (a YTD increase of 30%), compared to Ethereum's TVL 15% gain and BNB Chain's 12% uptick in the same period – a clear sign of Solana's successful DApps attraction. Also, the growth has enhanced Solana network's ability to manage large user bases and high volumes without requiring significant deposits. DApps volume ranking past 7 days, USD. Source: DappRadarThe remarkable surge in Solana's DApps volumes is unlike anything seen in the OpenSea NFT marketplace in the past week, recording $7.8 billion. Other Solana DApps such as the Jito staking solution and the Saber cross-chain liquidity exchange have also seen impressive volume increases of 102% and 130% respectively. Solana's success can be attributed partly to issues faced by competitors in managing transaction spikes. Although Solana experienced a five-hour outage in early February, recognizing these network issues might help curb negative impacts and highlight the scaling challenges faced by the industry. However, there's no sign yet that SOL token has reached a peak level. It's important to note that this article is for informational purposes only and it shouldn't serve as legal or investment advice. The views and thoughts expressed are those of the author and may not necessarily represent Cointelegraph's views and opinions.
Published At
3/1/2024 11:00:00 PM
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