Ethereum Rival Solana Rides Bitcoin Wave to 8% Daily Gain

Not content to let Bitcoin and Ethereum have all the fun, smart contract-enabled blockchain Solana is joining the party. 

SOL, the sixth-largest cryptocurrency by market capitalization, is up 27% over the last week and over 8% in the last 24 hours as it chugs back toward the record territory it broached just last month. It’s now trading at $188.25, 12% off its all-time high of $213.47 set on September 9.

Much of that can be attributed to Solana’s pursuit of a bigger piece of the decentralized finance (DeFi) market, which originated on Ethereum. DeFi refers to the protocols built atop a blockchain that allow people to put their crypto to work without going through a third party. They can loan funds, earn interest, swap tokens, or make other financial transactions on a person-to-person basis.

Just today, Solana recorded a record $12.7 billion in total value locked on the network. The metric looks at how much money is floating around on Solana-based platforms. That number impacts the price of SOL. Just as you need arcade tokens to play Pac-Man, Rampage or Donkey Kong, you also need SOL to utilize its DeFi ecosystem, from decentralized exchanges Serum and Raydium to yield generator Marinade.

Solana’s value proposition is that it’s just plain faster than Ethereum, which can handle about 15 transactions per second. Critics of Ethereum contend that won’t cut it as every bid on an NFT, every trade on a decentralized exchange, and every purchase on the network is competing for priority. As a result, the average transaction fee, in dollars, today stands at above $30, according to data from BitInfoCharts. 

That’s partially because Ethereum wasn’t designed with specific use cases in mind; Vitalik Buterin and his co-founders wanted to allow for a broad set of applications to take root on the network. By contrast, Solana has had its eye on DeFi since the outset and was designed to handle the transaction load necessary to make decentralized finance work more quickly.

There are, of course, trade-offs. Ethereum remains a more decentralized network in terms of the number of machines connected to the network; that’s good from a security perspective. And Solana experienced a massive network outage last month due to issues with network validators, suggesting that its high price and low transaction costs may come at a cost.

Not that price speculators care. On a day where Bitcoin, Ethereum, XRP, and Dogecoin are all trading even or down, SOL is shining.

Source: https://decrypt.co/84058/ethereum-rival-solana-rides-bitcoin-wave-daily-gain