Solana’s cryptocurrency SOL has seen steady growth in value over the past week, hitting a new all-time high of $ 48.46 on April 25 as most of the top coins struggled amid the downtrend in crypto markets.
According to CoinGecko data, the coin has grown over 44% over the past 7 days, bringing its market cap to $ 12.6 billion at the time of writing.
The popularity of the Solana network has been boosted by its high transaction throughput (over 65,000 transactions per second) and low fees.
These advantages have allowed it to position itself as an alternative to Ethereum at a time when the most popular network is suffering from increased congestion and gas prices.
The network has become a major destination for popular projects like Civic, USD Coin (USDC), and Tether (USDT) that use the network to expand the cross-chain capabilities of their platform.
Solana also has its own DeFi (Decentralized Finance) platforms which have enabled it to take advantage of the growing niche to attract investors through projects like Raydum and Serum, and to capitalize on the DeFi boom that has taken place over the past year .
Three years of development are now paying off for Solana
The Solana cryptocurrency was launched in March 2020 after three years of development by the Solana Foundation, the Switzerland-based organization responsible for launching the project and building its infrastructure.
The blockchain network was created with the principle of providing crypto apps with a high level of scalability without compromising speed, security or censorship resistance. The network has already processed over 16 billion transactions and has over 750 global validators
Solana uses a consensus mechanism for Proof of Stake (PoS) and Proof of History (PoH) to reduce transaction processing times.
The network also introduced other features that made it a force to be reckoned with in space, including Tower BFT, Turbine, Gulf Stream, Sea Level, Pipeline, Downpour, and Archiver.
While the technology behind Solana is incredibly complex, these features are designed to improve block propagation times, speed transactions, facilitate recovery and validation, and improve storage efficiency on the network.
Solana has also actively encouraged developers to create new applications over the network by creating a grant program.
With these grants, teams get access not only to funding to get their project started, but also to technical assistance, venture capital deployment, milestone grants, and recruiting support.
A ray of light on the crypto market
Very few projects at the top of the crypto rankings have seen growth in the past few weeks as two different crashes have occurred, making Solana’s success a case of particular interest to experts and investors.
One of the possible causes of the crash is US President Joe Biden’s proposals to raise taxes up to 40% for the richest citizens in the country in order to take advantage of the market.
The report hit the US equity markets as well, causing one of the largest falls in the past 5 weeks.
According to Todd Morakis, co-founder of digital finance product and service provider JST Capital, there is reason to believe that the new US president is responsible for the sell-off.
“People have been talking about the capital gains tax and the US stock market sell-off being the catalyst for this. If it’s true, we’ve moved too much – but once bitcoin gets steamed it’s hard to stop unless you’re in a technical area. “
Over the past 7 days, Bitcoin has seen a 7% drop in value while other projects like XRP; DOGE, DOT, LTC; BCH, LINK and VET had to accept a decline of between 12 and 25%.
As the market now appears to be recovering from the recent crash, investors are watching US economic policy very closely to prepare for the resulting volatility.