Today, the price of the SOL coin reached a new high. In a nutshell, Solana is a blockchain that is similar to Ethereum in terms of functionality.
- DeFi applications are possible because to smart network contracts.
- Those DeFi apps are bringing in more cash than ever before.
- Solana, another Ethereum competitor, means "sunshine" in English. And wow, is the blockchain exploding right now.
According to stat watcher DeFi Llama, the Solana network's total value locked topped $2 billion for the first time today. The total value locked, or TVL, is the number of crypto assets tied up in the network's decentralized finance (DeFi) protocols.
DeFi protocols enable a wide range of financial operations, such as taking out loans, earning interest, and swapping assets, all while avoiding the use of human middlemen through the use of automated "smart contracts." DeFi began on Ethereum, where roughly $110 billion is invested in protocols including Aave, Compound, and Uniswap, but it has since migrated to other networks, with Binance Smart Chain ($17 billion in TVL) being the most prominent competitor.
Solana has also been attempting to entice DeFi developers and users away from Ethereum, which has struggled to handle an increase in transactions driven by, first, increased demand for DeFi applications, and later, surging interest in NFTs, blockchain-based deeds to digital and/or real collectibles. Solana is already what Ethereum aspires to be with Eth 2.0, according to the developers behind the upstart proof-of-stake network: a fast, scalable network with transaction fees measured in cents rather than dollars.
Polygon, a network created on top of Ethereum that attempts to relieve some of that burden, has complicated its aim significantly. More money is locked into DeFi lending protocol Aave via Polygon than total TVL on Solana, according to DeFi Llama.
Solana, on the other hand, is speeding up as it imitates Ethereum both physically and symbolically. The NFT collection Degenerate Ape Academy sold out this week, generating $5.9 million in trading volume, propelling SOL into the top 10 by market cap. According to CoinGecko, the price of SOL has increased by 70% in the last week, reaching a new high of $74.08 this morning. DeFi protocols like Raydium (think of it as Solana's version of Uniswap) use SOL as an onramp into their crypto environment, rather than USD or ETH.
Internet Computer and EOS, two other so-called Ethereum killers, have risen in price and/or user numbers in the past, only to plummet in price and/or user numbers. Solana is taking advantage of the beautiful weather. It simply does not want to approach the sun too closely.
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