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What is really behind Solana’s emergence as the leading blockchain ecosystem in 2024?

By Solomon Victor

According to CoinGecko’s report, Solana is the leading blockchain ecosystem in 2024. With competitive blockchains such as Ethereum, Tron, Binance Smart Chain (BSC), and others, what is really behind the emergence of Solana as the leading blockchain ecosystem in 2024? Is it sustainable? Find out.

Solana’s Ascendancy

CoinGecko’s latest findings paint a clear picture: Solana has grasped the lead and has now become the most significant blockchain ecosystem for 2024. Its current fame started to take off in the midst of the greatest growth of market cap, network trading volume, and attention from investors.

The spike of Solana (SOL) price to over $200 for the first time in two years pushed its market capitalization to over $80 billion. The SOL price surge is not merely an issue of price; fundamentals are the driver of the growth.

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Additionally, Solana’s on-chain volumes and network fees show an unprecedented gain, suggesting equally rising user activity and market interest. At the time of writing, the value of SOL is $191, with over 70% increase in the last 30 days, according to data from CoinGecko

Read also: What is Blockchain Technology? Meaning, Types, and Use Caseas

Solana vs Other Top Blockchains

In comparison with other top blockchains, Solana has shown strength in terms of user-activity growth and transaction volume. While Ethereum arguably remains the heart of the crypto sphere particularly with smart contracts and decentralized finance (DeFi), investors are in dire need of alternatives. Many of these investors are turning to layer-2 solutions built on the Solana platform.

Ethereum, which was referred to as the undisputed king of the blockchain world, has noticed its power being challenged by ambitious platforms such as Solana and BSC. While Ethereum still commands a large market share with dominance of 16.8% and is relatively the most centralized ecosystem for developers and investors, this level of dominance is no longer guaranteed.

The United States Securities and Exchange Commission (U.S SEC) is currently reviewing bids regarding the spot exchange-traded funds (ETFs) tied to Ether (ETH), the second biggest cryptocurrency by market capitalization. The approval of such ETFs will likely attract substantial liquidity and respectability to Ethereum’s space, thereby offering institutions and retail investors a chance to invest in the native Ethereum token, ETH. 

While Solana’s staggering run-up poses a great threat to BSC’s reign, it has led to a fierce rivalry between the two champions in the arena. However, as BNB price rises and the ecosystem continues to grow, BSC remains the go-to for many crypto investors and developers alike. 

Though Solana is currently experiencing rapid growth in all dimensions, uncertainties generally remain about its future, relative to other blockchains. The rivalry between Solana and BSC, for instance, continues to heat up. Trailing behind Ethereum and Tron, BSC and Solana presently compete for 3rd place in the blockchain ecosystem.

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According to Defillama’s data on total value locked (TVL), Ethereum tops the list with more than $52.41 locked in various DeFi projects. Following Ethereum are Tron, Binance Smart Chain, and Solana with TVLs of $9.9 billion, $5.88 billion, and $4.57 billion each, respectively.

What is driving Solana’s popularity?

  • Faster transactions and lower fees

Simply, Solana is efficient. When compared to Ethereum particularly, Solana offers faster transaction speeds as well as lower fees. This greatly attracts decentralized finance (DeFi) projects to the Solana blockchain ecosystem. Network congestion and high gas fees are not great for business.

  • DeFi projects

A critical feature that boosts Solana’s performance is its fast-growing adoption by DeFi and decentralized exchange (DEX) network. For DEXs for instance, this comprises exchange platforms like Jupiter and Raydium which witnessed an upsurge in activity.

  • Memecoin projects

Memecoins, however how highly vulnerable they are, have always found a way to help boost adoption in the crypto space. Pioneering memecoins such as Doge and subsequently Shiba Inu have played similar roles in crypto adoption. In the Solana ecosystem, memecoins such as Bonk (BONK) and dogwifhat (WIF) have found their way into those DEXs, making them quite popular assets.

To the crypto investor

SOL’s performance hints at a good chocolate to bite, but not financial advice (NFA). Always proceed with caution. All cryptos are highly volatile, and so is SOL. Don’t get enchanted by the wave of memecoins in the Solana space. 

Do your own research (DYOR). Look closely so you don’t get caught up in pump-and-dump projects. While all that goes up do often come down eventually—and may be up again subsequently—you want to be sure that you are part of a sustainable project, not an overnight one. Do your due diligence.

Read more:

Solana and Its Ecosystem: Blockchain, Token, and Projects

Credit: Solomon Victor is a Technical Analyst who is also knowledgeable about various aspects of blockchain and cryptocurrency.