Solana, the biggest competitor to Ethereum’s dominance over DeFi, has exploded in popularity this year. The platform has raced past some prominent blockchains to secure itself the fifth slot in the top ten global cryptocurrencies by market cap.
In the meantime, the market capitalization of Solana has crossed $52 billion as the platform’s native token, SOL, surges. From its all-time low of $0.5052 in May 2020, SOL rallied throughout 2021, reaching an all-time high of $260.06 in November 2021.
As a highly versatile open-source blockchain project, Solana has quickly positioned itself as the newest favorite of the DeFi ecosystem. This third-generation layer-1 blockchain can facilitate a wide array of dApps, DeFi solutions, and smart contracts. Unlike other existing chains, Solana uses the hybrid consensus of proof-of-history (PoH) and proof-of-stake (PoS) mechanisms, which allows it to process up to 50,000 TPS and 400ms block time.
Amidst Ethereum’s problems related to scalability and gas costs rising at an alarming rate, Solana proved its worth, as hundreds of developers, both veterans and beginners, lined up to build on its infrastructure. A flurry of promising projects, spanning across DeFi, NFT, lending, and blockchain games, were quickly onboarded to the platform, helping SOL’s value grow spectacularly throughout 2021.
At present, the Solana ecosystem boasts more than 500 dApps, including DeFi projects like Serum, Mango, Drift Protocol, Raydium, and Saber, lending protocols like Apricot Finance, Jet Protocol, Francium, Solend, and more, NFT marketplaces like Metaplex, Magic Eden, Solanart, and Solanalysis, as well as Web3 apps like Audius, Wum.bo, Brave Browser, Squads, and a lot more.
The Solana protocol’s total value locked (TVL) crossed $11 billion in the fourth quarter of 2021, with Raydium contributing the most, followed closely by Serum. One of the core reasons behind the exponential growth of Solana is its dynamic ecosystem. At a time when most layer-1 chains are becoming increasingly dependent on layer-2 scaling solutions, Solana presents itself as a layer-1 chain that offers the fastest-ever transaction speeds in the blockchain ecosystem.
Furthermore, the platform ensures that transaction fees for both developers and users will always remain less than $0.
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