Key Highlights
- The cryptocurrency market is experiencing a mix of fluctuations, with some coins dropping and others surging.
- Bitcoin, Ethereum, and XRP are particularly volatile, while Solana has achieved impressive growth, increasing by 28%.
Solana is often compared to Ethereum, as it has a fast-growing ecosystem and is adaptable to decentralized apps. Compared to Ethereum and other competing blockchains, Solana is significantly faster and has lower transaction fees. In 2021, Solana’s cryptocurrency, SOL, saw an almost 12,000% increase, and at one point, its market valuation was around US$66 billion, making it the fifth-largest cryptocurrency at the time.
However, like other cryptocurrencies, Solana was not immune to the 2022 cryptocurrency market decline. As a result, its market value dropped to almost $11.71 billion by October 3, 2022, and it fell to the ninth position in market capitalization.
Significant Upgrade of Ethereum
Ethereum comes second in terms of market value, after Bitcoin, due to its first-mover advantage and extensive ecosystem. The significant upgrade of Ethereum combined its Beacon Chain and Mainnet Chain, making its blockchain more scalable, secure, and long-lasting. Future upgrades will include sharding, significantly reducing transaction times, and alleviating network congestion.
In the long run, the perception of any cryptocurrency can change drastically. For example, concerns about Solana’s network interruptions seem normal teething problems for a new blockchain network.
The same people who are critical of Solana also criticize Ethereum’s network congestion and high fees, and they highlight hacks and exploits on other blockchain systems like Binance. It’s worth noting that the Solana network is not the only one that experiences outage problems.
The inflationary cryptocurrency Solana does not have a firmly capped total number of tokens. Instead, it starts with a yearly inflation rate of 8%, which decreases by 15% annually until it reaches the fixed long-term rate of 1.5%.
Of the initially allocated SOL tokens, 38% were sent to the Solana Foundation’s community fund reserve, 25% were split among Solana’s staff and the non-profit guiding the cryptocurrency’s development, and investors received 37% of the tokens. Sentiment, a blockchain analytics company that conducts social media sentiment analysis, suggests that the high bearish sentiment around Solana could indicate a short-term upsurge.
