Driven by DeFi activity and NFT sales, Solana rose to prominence the fall of 2021. Constantly pushing the envelope, its team now wants to onboard “one billion users” in the following years.
Named after a famous beach near San Diego, California, Solana is the brainchild of former Dropbox engineer Anatoly Yakovenko. Development started in 2017, and in April 2018, he and his co-founder, Greg Fitzgerald, secured their first backing from Abstract Ventures and 500 Startups. Solana had its big break in 2020 when Sam Bankman-Fried backed the project. He successfully deployed FTX’s decentralized exchange protocol, Serum, on Solana. In 2021, Polychain Capital and a16z injected $314 million into the blockchain venture with a private token sale.
Solana’s beta mainnet saw the light of day in March 2020 and quickly attracted developer attention. According to recent research, it is on a path to overtake Ethereum when comparing developer activity in the form of GitHub commits, pull requests and forks.
Solana developer activity exhibits substantial growth
This chapter will focus on metrics that reflect the real-world usage of Solana. Looking at the meteoric price growth is a good indicator of investor confidence. To gain a deeper understanding, we’ll look at unique addresses, lending and staking rates, and protocol revenue plus the price-to-sales ratio.
As a marker of centralization risk, we’ll finally look into how many tokens are held by the team and VC backers.
Solana Summer: SOL price rose more than sixfold in autumn 2021
Solana’s (SOL) price was on an absolute tear starting in August 2021, called “Solana Summer.” The token’s value rose from $35.15 to a high of $258.65 between Aug. 1 and Nov. 6, 2021. A boom in NFT sales, perpetual futures volume and a tight-knit community propelled Solana’s market capitalization to more than $73 billion and made the token No. 4 on the CoinMarketCap list of coins sorted by market cap at times.
Seen from a November 2021 perspective, Solana is up more than 130x from a year ago and outperformed all other top 100 tokens except Axie Infinity (AXS), Kadena (KDA) and Fantom (FTM).
This article is an extract from the 80+ page Scaling Report: Does the Future of Decentralized Finance Still Belong to Ethereum? co-published by the Crypto Research Report and Cointelegraph Consulting, written by ten authors and supported by Arcana, Brave, ANote Music, Radix, Fuse, Cryptix, Casper Labs, Coinfinity, Ambire, BitPanda and CakeDEFI.