Why is Solana popular among institutional investors?

It has risen by 5.63% in 24 hours, 12.61% in the past seven days, and 191.99% in the past 30 days…Solana’s performance in the past period of time has directly made Solana ( SOL ) jump into the top 10 cryptocurrencies in the world.


(SOL trend chart)


(Top ten cryptocurrencies in the world)

Solana is a high-performance public chain with three core features: scalability, decentralization, and low cost. The current maximum TPS can reach 50,000+, the block generation time is about 400 milliseconds, and the number of global nodes exceeds 300. The core of its expansion scheme is the decentralized clock of the proof of history (PoH). Through the verifiable delay function, PoH allows each node to use the SHA256 algorithm to generate a time stamp locally, eliminating the need to broadcast the time stamp in the network, thereby improving the entire network Efficiency. With the improvement of hardware, broadband, and network capacity, network performance will expand accordingly. Solana is committed to supporting Internet-scale blockchain applications.

It is worth mentioning that SOL became the most popular digital asset for institutional investors last week, because SOL investment products attracted more institutional investment than Bitcoin and Ethereum.

CoinShares recently released a report on the flow of digital assets mentioned that Solana is a competitor of Ethereum, providing flexible infrastructure and faster transaction settlement. Last week, investment products related to Solana attracted 7.1 million US dollars, and Ethereum investment The inflow of products was US$3.2 million. In addition to Solana and Ethereum, other cryptocurrency assets including Cardano (ADA), Litecoin ( LTC ) and Polkadot (DOT) also attracted a large amount of capital inflows during the aforementioned period, with inflows of US$6.4 million, US$1.8 million and US$1.1 million, respectively.

First of all, Solana achieved a substantial increase in 2021. At present, Solana’s transaction price is US$78.53, with a market value of more than US$20.8 billion. Data shows that the number of wallets holding 100-1000 SOL has doubled in the past three weeks. The strong FOMO sentiment and retail demand in the crypto market have driven its price increase, but the latest institutional data shows that SOL has also increased because of its price. And welcomed by institutional investors.

In fact, the organization’s attention to Solana has long been clues. For example, Goldman Sachs mentioned Solana many times in the June report “Digital Assets: Beauty Is Not in the Eye of the Beholder”. At the same time, the report also pointed out that Solana has brought improvements after its launch: it adds a proof-of-history algorithm in the verification process to effectively track the order of transactions, which is considered a major breakthrough in terms of speed and capacity. The historical proof is a supplement to the proof-of-stake process and enables the validator to confirm each block more effectively. In addition, it allows validators to run thousands of smart contracts in parallel. In addition, Solana can process 50,000 transactions per second. At the same time, interoperability has been enhanced through its unique Ethereum bridge “wormhole”; although other interoperability solutions exist, such as those provided by Polkadot and Cosmos, Solana has developed its own interoperability features that allow Users take advantage of Solana’s speed while achieving interoperability. In addition, developers can use popular programming languages ​​on the Solana blockchain. Such as C/C++ or RIST. At the same time, the average transaction cost is very low.

In addition, Solana is the native token of the public blockchain Solana supported by Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX. There are now more than 400 projects in the Solana ecosystem, and they are constantly increasing. These projects include wallets, DEXs, loan agreements, mortgage platforms, digital games, storage solutions, meta universe platforms, and more. The gradual construction of the entire ecology continues to introduce vitality to the development of Solana. In June of this year, the Solana Foundation also launched a US$20 million fund in cooperation with ROK Capital, a large-scale blockchain accelerator in South Korea, aiming to develop the Solana blockchain ecosystem by helping various projects. Through cooperation with South Korean companies, the fund will also enable Solana to expand its local influence.

In addition, Solana’s explosive growth is related to the current hot NFT. Last month Solana built a new NFT market Lollapalooza, which will include upcoming products from artists such as Steve Aoki. On August 10, BurntFinance, a decentralized auction protocol based on the Solana chain, announced that it will form a SolanaNFT alliance with multiple ecological projects to jointly promote common standards between Solana-based projects. BurntFinance stated that a key part of Ethereum’s success is the common technical standards (such as ERC20, ERC721) adopted by major projects in the entire ecosystem. Solana lacks such a standard, and if it is not adopted, it will be difficult to maintain its strong growth rate. The first batch of SolanaNFT alliance members include: BurntFinance, Phantom, Bonfida, AustinVirtis, Metaplex, Solarians.

It is worth noting that the most direct reason is that the non-homogeneous token project Degenerate Ape Academy was launched on the Solana blockchain in August. With the launch of the NFT project, the price of SOL has also risen rapidly. Degenerate Ape Academy released a total of 10,000 pictures. These unique cartoon apes pictures were sold out in just 8 minutes, and the total transaction volume reached nearly 96,000 SOL (over 5.9 million US dollars).


Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-is-solana-popular-among-institutional-investors/
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