You know Bitcoin. Most likely, you have heard about Ethereum. And even if you’ve just been watching TV at some point this year, there’s a good chance you’re familiar with Dogecoin too.
What about SAUL? A lesser—known coin is going through a turbulent period of the rise of the cryptocurrency – soaring in the charts to strengthen its place in the top 10 cryptocurrencies recently. It rose by about 28% in the seven days leading up to April 4, at a time when the bitcoin price remained unchanged after jumping by about 40% from the January low.
SOL, a cryptocurrency powered by the Solana blockchain, is seen as a potential long-term competitor to Ethereum. This is because it is more than just a coin: Solana and Ethereum have gained support among the communities of programmers who have created features such as smart contracts and NFT on the platforms. Evangelists hold regular meetings from San Diego to Hong Kong.
According to Jonathan Cheeseman of the FTX crypto derivatives exchange, Solana’s recent surge may be due to the popularity of the Solana-based STEPN fitness-related app and the intention to incorporate NFT from its blockchain into OpeanSea, a major trading platform for digital collectibles. .
Compared to other dominant coins, Solana is relatively young. The idea of Solana was first published in 2017 by developer Anatoly Yakovenko, and SOL debuted last year, and its cost skyrocketed at the end of the summer.
One key advantage? Transactions in the Solana blockchain are relatively cheap. Miners who verify transactions in Solana charge much less than those used in Ethereum, because Solana technology allows for much more transactions per second — tens of thousands compared to less than 100 for Ethereum. In fact, this means that the competition for a place in the Solana blockchain is not so great.
“Ethereum is playing catch—up here,” said Ed Moya, senior market analyst at Oanda. “They will increase the speed of their transactions, but their costs will still be much higher than Solana’s.”
But things weren’t going smoothly for Solana. In September, due to a severe glitch, transactions were interrupted for 17 hours. Some doubted the network’s ability to grow, while adherents of Bitcoin and Ethereum saw this as proof of the benefits of using more established crypto projects. Supporters said it was a bout of growth sickness.
In this wild competitive hunt for the next big thing, SOL stood out. Thousands of new coins have flooded the crypto space, the vast majority of which do not have the functionality or depth of large coins such as SOL, although new projects, new stocks and new investors appear daily.
What is SOL?
SOL is a coin running on the Solana network. Solana is a platform for decentralized financial applications and other smart contracts. On it, people can borrow, trade, borrow and use crypto assets. SOL is flourishing, promising that unlike Ethereum, its main competitor, transactions on Solana will be cheap and ultra-fast. In other words, the project rejects the assumption that blockchains should be expensive, slow and inefficient. Thanks to this potential, the value of the coin has increased by about 488% over the past year.
How’s SAUL doing?
According to CoinMarketCap, as of early April, SOL has become the sixth largest cryptocurrency by market capitalization with a value of about $44 billion. This is well below Bitcoin’s market value of about $877 billion. This is also below the approximately $418 billion of Ethereum, which took second place. But SOL tends to stand above other altcoin favorites like Cardano or Litecoin, as well as non-utility players like Dogecoin and Shiba Inu, another dog-related coin linked to Elon Musk.
Prominent Solana investors are joining us. In June, Solana Labs announced that it had raised $314 million through the sale of coins to the network. Among the investors were Andreessen Horowitz, Polychain Capital, Alameda Research and CoinShares.
How are things going with the purchase?
If you like smart contracts: charts comparing cryptocurrencies by market value can be misleading. This is partly due to the fact that crypto networks have such different use cases. Paul Veraditakit, a partner at the California-based company Pantera Capital in Menlo Park, divides crypto projects into several categories.
Mr. Veraditakit combines the Solana network with Ethereum, which pays great attention to allowing people to create computer applications inside their system. Users can create so-called smart contracts, which, for example, automatically make payments and exchange data at a predetermined time, subject to certain conditions.
“Right now I would say Solana is the main competitor in terms of developer adoption and dynamics compared to any of the smart contract platforms,” said Mr. Veradittakit.
Bitcoin, on the other hand, he sees as a means of saving and possibly a currency. According to him, consumers in emerging markets may eventually prefer the use of bitcoin to their local currencies, because the cryptocurrency, no matter how unstable it may be, may be more stable.